December 10, 2012

Argentina to cut 2012-13 wheat export due to poor harvest

Due to a smaller than forecast harvest, Argentina will slash the quantity of 2012-13 wheat export to 4.5 million tonnes from a previous six million tonnes.

Argentina's government curbs wheat and corn exports to ensure ample and affordable domestic supplies of food.

The wheat harvest in Argentina will be smaller than expected and of poorer quality this season as farmers slog through waterlogged fields, trying to save their crops from toxic fungi bred by too much rain.

Argentina's government has already told exporters that include grain giants like Cargill and Bunge that it will reduce the quantity of export permits to ensure local supply, according to a newspaper.

The announcement comes at a time when world grain markets are contemplating the risk of prolonged supply tensions. Consumer nations have seen their wheat bills soar this year and Argentine supply has been eyed to help cap prices.

Argentina's government forecasts the 2012-13 wheat crop at 11.1 million tonnes, recently marked down from 11.5 million. But with more than 26% of the harvest already collected, yields have been poor, prompting some analysts to reduce their projections for the full crop. Argentina's new export policy took effect this year.