October 3, 2009

 

Argentina appoints advisory council for corn, wheat exports

 

 

Argentina's agricultural trade office, known as ONCCA, published a resolution Friday putting a council in charge of determining how much corn and wheat supplies can be exported, two days after it said it is reopening exports.

 

The resolution allows for a reopening of exports on condition that domestic supplies are sufficient.

 

To make that determination, ONCCA will take into consideration an evaluation of market conditions by the advisory council before granting corn and wheat export permits, according to the resolution published in the Official Bulletin.

 

The council will be made up of the president of ONCCA and representatives of the Production Ministry, Commerce Secretariat and the federal tax agency, as well as from the Center of Cereals Exporters and the Argentine Milling Industry Federation.

 

The resolution stipulates that eight million tonnes of corn and 6.5 million tonnes of wheat must be set aside from the 2009-10 harvest to meet domestic demand.

 

The government has put limits on corn and wheat exports to ensure sufficient domestic supplies so not to drive up prices and stoke inflation.

 

However, the export restrictions have led to a dramatic shift towards soy, leading to a plunge in output of corn and wheat, a situation worsened by a severe drought. Farmers are expected to plant a record area with the oilseeds this season because of slim demand at home and a lack of export limits.

 

The Rosario Grain Exchange forecasts 2009-10 corn production at about 16 million tonnes, down from more than 20 million in the previous two seasons.

 

That means as much as eight million tonnes of 2009-10 corn will be available for export, according to the Rosario Grain Exchange.

 

The US Department of Agriculture forecasts seven million tonnes of exports from the 2009-10 corn crop.

 

Argentina's corn exports fell to 6.7 million tonnes in the first eight months of 2009 from 12.7 million in the year-earlier period, according to the latest data from the animal health and sanitation service Senasa.

 

For wheat, the Rosario Grain Exchange says 2009-10 production is likely to total about 7.4 million tonnes, down from 8.7 million tonnes in 2008-09 and an average of 14.76 million tonnes over the previous five years.

 

That means meaning just over 900,000 tonnes of 2009-10 wheat will likely be left over for export.

 

The USDA is expecting Argentina to export 1.5 million tonnes of wheat and wheat flour from the 2009-10 crop.

 

Wheat exports fell to 4.2 million tonnes in the January-August period of 2009 from 6.2 million in the year-earlier period, according to Senasa.

 

According to the resolution Friday (Oct 2), the corn and wheat surplus authorised for export by ONCCA will be calculated by adding expected production from the latest harvest with stocks left over from the previous harvest and then subtracting domestic demand and provisions for seeds for the next planting period.

 

If the local market is lacking supplies, exporters must meet that demand, according to the resolution.

 

Only exporters that signed a September 10 agreement with the federal government to reopen exports can seek permits for selling 2009-10 corn and wheat. Those that didn't sign must do so to be eligible for export permits.

 

Exporters who pay export taxes in advance have 365 days to complete shipments once approved by ONCCA.

 

Those that want to pay exports at the time of making a sale, have 45 days to complete the shipment.

 

Trading of corn and wheat spot and futures contracts has been virtually nonexistent since June in anticipation of a reopening of exports of the products.