October 7, 2011

 

Argentina may sell corn to China

 

 

Argentina hopes to have an agreement with China in November that would allow it to export corn to the country, according to the Agriculture Secretary Lorenzo Basso on Wednesday (Oct 5).

 

According to Reuters, China does not buy Argentine corn currently due to curbs on the genetically modified varieties that account for about 80% of the South American country's corn production.

 

But China's need for corn has increased and is likely to more than triple its corn purchases in the crop year starting in October.

 

"It is possible that we will sign the deal when I travel with Agriculture Minister Julian Dominguez to China in November," Basso said.

 

He also added that the deal could be closed in December at the latest.

 

Argentina, which is already a major supplier of soy to China, began talks late last year to complete a market access agreement and open the corn market in the world's most populous nation.

 

Argentina's government expects to produce a record 30 million tonnes in the 2011/12 season and analysts said it could export at least two to three million tonnes to China.

 

The South American country is the world's second-largest corn exporter, but it restricts exports of corn to ensure adequate domestic supplies to fight surging inflation.

 

China was forced to look overseas last year as corn supplies failed to match booming demand. It is likely to import four million tonnes in the crop year starting in October as strong livestock feed demand swallows up a bumper harvest.

 

Argentina's 2011/12 corn output is estimated at 27.5 million tonnes and exports are seen at 19.5 million tonnes, according to the USDA.

 

"I think there would be no problem in selling two to three million tonnes to China without having to stop sales to traditional markets," said the director of the Buenos Aires-based consulting firm Agritrend.

 

La Nina-related dryness has delayed Argentina's 2011/12 corn plantings, which began in September. The previous corn record was set during the 2009/10 season, when output reached 22.7 million tonnes.

 

Basso also said Argentina will allow a new type of genetically-modified corn starting in October and the government is analyzing approving the use of Roundup Ready 2 Yield soy, developed by US-based Monsanto.

 

"If all goes well, we will probably have that soy in the 2012/13 season," Basso said of the genetically modified soy that is already used in neighbouring Brazil.

 

Monsanto's original Roundup Ready soy variety, which was never patented in Argentina, although it became ubiquitous, caused years of legal wrangling with the government. The new strain has already been patented.

 

The government in August approved the use of genetically-modified soy seeds made by German company Bayer as part of its push to increase farm output.

 

"New technologies will arrive if intellectual property rights are recognised," Basso said.