September 8, 2009

Argentine agrochemical imports during the first seven months of the year plunged 80 percent on the year as farmers cut investment amid a simmering conflict with the government over grain export taxes and intervention in agricultural markets.

 

Just 263,000 tonnes of agrochemicals valued at US$439 million were imported between January and July, think tank IES Consultores said in a report Monday (Sept 7).

 

The figures show a clear retraction of the farm sector, which is suffering "from the drought and erratic government policies, which affect planting decisions and demand for inputs," IES said.

 

Fertiliser imports during the period fell over 90 percent.

 

The leading provider of Argentina's agrochemical imports was China, with 41 percent, followed by Brazil with 16 percent, the US with 15 percent and Russia at five percent.

 

Farmers have just finished planting the 2009-10 wheat crop, with just 2.8 million hectares seeded, the smallest area going to the crop in over 100 years, according to the Buenos Aires Cereals Exchange.

 

Commercial corn area is expected to be down sharply as well. Planted area is expected to total just two million hectares, a 19-percent drop on the year.

 

Farmers are expected to continue the shift to soy.

 

Soy planting is likely to surge to between 19 million and 20 million hectares during the 2009-10 season, according to private analysts. That would shatter the record set during the 2008-09 season, when farmers seeded 16.6 million hectares with the oilseed.

 

Farmers lifted a one week strike Monday, which they called to protest a presidential veto of export tax breaks for some farmers hit hard by drought last season. Farmers protest bitterly over grain export taxes, which run as high as 35 percent in the case of soy.

 

Government limits on corn and wheat exports designed to ensure domestic supply has led to a big shift away from those crops and to soy. There is virtually no domestic demand for soy, and exports are not controlled.