December 2, 2010

Argentina signs first batch of 2010-11 corn export

The Argentine government has signed a deal with corn exporters authorising the first batch of exports from the 2010-11 corn crop, agreeing to allow five million tonnes to be shipped by February 15.

Argentina tightly regulates corn and wheat exports, granting export permits only after domestic stocks have been covered.

According to the Agriculture Ministry, Argentina's corn production is set to hit a record 26 million tonnes. That would be up sharply from the 22.5 million tonnes grown last year, according to USDA.

If that production is confirmed, Argentina will likely end up exporting around 18 million tonnes of corn from the crop after eight million tonnes is set aside for domestic use, stated the ministry. However, with dry weather expected in the following months due to the La Nina weather phenomenon, there are growing doubts over whether output will reach the levels initially forecast.

During 2009, the top buyers of Argentine corn exports were Iran, Algeria, Colombia, Egypt and Peru. The government is currently in talks to open corn exports to China. China has traditionally been a big corn exporter, but drought problems last season and soaring demand led China to import this year.

However, Argentina and China first have to first settle a phytosanitary agreement on acceptable strains of genetically modified corn, which is likely to be wrapped up in the first half of 2011, Agriculture Minister Julian Dominguez said Wednesday (Dec 1).

Analysts have estimated that China may need to import five million tonnes of corn from Argentina. But China has reaped a good harvest of corn recently, which may reduce the demand for imports. China has so far imported about 1.5 million tonnes of corn this year.