August 8, 2012

Argentina's corn area in 2012-13 is anticipated to drop 20% from the 2011-12 crop year to 3.1 million hectares (7.7 million acres).

Argentina is the world's No. two corn exporter after the US, where a Midwest heat wave has ignited supply worries and pushed up global prices in recent weeks.

Corn planting in the South American country is set to start at the end of this month.

The Buenos Aires Grains Exchange said Tuesday (Aug 7) that 3.87 million hectares were planted with corn in the 2011-12 crop year, which was hit hard by a December-January drought.

"Reduced investment capacity among some growers following a bad season, the increase in some costs and a moisture deficit in a big part of the grains belt are variables that counterbalance incentives to plant," the report said.

On the incentive side, the government has bowed to pressure from growers to scrap its incremental corn and wheat export quota scheme in favour of unveiling the full exportable amount early each season. The new policy aims to improve farm revenue by increasing competition among buyers.

In July, Argentina pre-approved the export of 15 million tonnes of 2012-13 corn. Growers applauded the one-shot allocation as a possible step toward dropping export limits altogether.

Official estimates are not yet available for 2012-13 Argentine corn output. Production in the 2011-12 crop year will be 21 million tonnes, according to the Agriculture Ministry.