December 25, 2006

 

Argentina's exporters to sell corn to poultry farms

 

 

The Argentine government has reached an agreement with the Cereal Exporters Centre (CEC) under which corn exporters will sell 13,000 tonnes of corn to the principal local poultry producers at the discounted cost of 280 Argentine pesos (US$91.80) per tonne, leading daily La Nacion reported Friday (Dec 22).

 

Spot corn was priced at ARS375 at the Rosario Grain Exchange Thursday.

 

The agreement is designed to keep down domestic chicken prices by preventing surging world corn prices from reaching the pocketbook of consumers.

 

The government is struggling to reign in inflation, a hot political issue in the run-up to presidential elections in October 2007.

 

The agreement comes on the same day as dairy producers and exporters reached preliminary agreement to create a fund which will compensate producers with contributions from the surging margins enjoyed by dairy exporters, La Nacion said.

 

Powdered milk export values have risen from US$2,100 to US$2,600 per tonne over the past month, according to the paper.

 

The agreements follow rumours that the government is considering raising the export taxes on corn, wheat and soybeans to prevent surging international prices from spurring domestic inflation in food.

 

However, Economy Minister Felisa Miceli this week denied that increased export taxes were being considered at this time.

 

Argentina will use 2.8 million tonnes of corn from the 2006/07 corn crop for poultry feed, according to the Rosario Grain Exchange.

 

Dairy farm consumption is estimated at 1.5 million tonnes, while cattle feedlots will use 1 million tonnes and pork production will consume a further 800,000 tonnes, according to the exchange. Altogether, Argentina will need 5.8 million tonnes of corn for animal feed from the new crop, according to the exchange.

 

The US Department of Agriculture estimates that Argentina will produce 19 million tonnes of corn in 2006/07.