May 27, 2013
Argentine farmers will expand planting of wheat by 40% this season compared with the 2012-13 crop year, brought about by high wheat prices, a government tax rebate plan and expected good weather.
Agriculture Secretary Lorenzo Basso said, "The area will be close to 4.5 million hectares, for sure."
In the 2012-13 growing season, which ended in February, the Argentine government says farmers sowed wheat on 3.16 million hectares, the smallest area on record.
Other estimates vary. The Buenos Aires Grains Exchange forecasts Argentina's 2013-14 wheat area at 3.9 million hectares, up from its estimate of 3.6 million last season.
Argentina's wheat planting for 2013-14 have already begun and the country is a key supplier to neighbouring Brazil. However, farmers have turned to other crops in recent years due to government export curbs meant to ensure ample domestic food supplies. Growers believe that the curbs distort prices.
To reverse the trend and spur more wheat sowing, the government is giving tax rebates to farmers to compensate for a 23% levy on wheat exports.
"Wheat planting area will increase for several reasons: the rebates, good soil moisture and better market conditions," Basso said. Benchmark Chicago wheat prices are up 3.8% so far this year.
In March, Argentine officials authorised exports of five million tonnes of wheat for 2013-14, as part of the drive to increase production.
The USDA forecasts Argentina's wheat crop for 2013-14, at 13 million tonnes, up from the previous season's output of 11 million tonnes.