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December 30, 2008

 

Argentina's corn and wheat exports up; shipments may drop in 2009

  
  

Argentina exported 544,016 tonnes of corn and 465,386 tonnes of wheat in November, up 41.7 percent and 4.41 percent on-year respectively, according to the National Food Safety and Quality Service (Senasa).

 

Corn exports during the first 11 months of 2008 totalled 15.2 million tonnes, up from 14.4 million tonnes in the same period a year ago.

 

There is virtually no old-crop corn available for new export sales, according to agricultural trade office ONCCA, and Argentina's corn exports are also likely to be significantly lower next season.

 

Argentina's corn planting will fall to 2.44 million hectares this season, according to the exchange's current forecast, down sharply from the 3.2 million hectares last season.

 

Production is estimated at 18 million tonnes by the USDA, down from 20.5 million tonnes grown in 2007-08, but local forecasts are predicting an even sharper drop in production.

 

Higher production costs for corn relative to soy and dry weather early in the planting season are blamed for the shift.

 

About 14.7 million tonnes were exported from the 2007-08 crop. Domestic demand is currently pegged at 6.1 million tonnes, but the amount withheld for domestic consumption may be increased somewhat due to increasing use of corn in feedlots, the president of ONCCA, Ricardo Echegaray, said.

 

If the USDA's forecast for Argentina corn production holds and the domestic-use quota is unchanged next year, that would leave just 11.9 million tonnes available for export.

 

Wheat shipments during the first 11 months of the year totalled 8.2 million tonnes, even with a year earlier.

 

Last month, ONCCA authorised 675,011 tonnes more wheat for export, leaving 1.1 million tonnes from the old crop available for export.

 

However, new-crop exports are expected to be sharply limited this season.

 

With the wheat crop struggling due to drought and the low planted area this season, there isn't expected to be much left over for export.

 

On December 18, the Agriculture Secretariat cut its forecast for 2008-09 wheat production to 9 million tonnes, down 1.1 million tonnes from last month's forecast.

 

Domestic demand will likely rise to 7 million tonnes in 2009 from the 6.1 million tonnes set aside for local use this year, said Echegaray.

 

ONCCA must approve all grain and beef exports and only clears shipments once stocks sufficient to meet domestic demand, as set by the government, have been confirmed.

 

With domestic consumption pegged at seven million tonnes, that will leave just two million tonnes left for export if current forecasts hold, down sharply from the 10.2 million tonnes of wheat exported from the 2007-08 crop, according to the USDA.
   

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