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Argentina suspends corn exports to safeguard domestic food supplies

31 December 2020

In a surprise move, Argentina’s agriculture ministry has suspended sales of corn for export until 28 February as part of a strategy to ensure domestic food supplies.

Reuters reports that the move by the world's third largest corn supplier was a sign of tightening global food supplies during the COVID-19 pandemic.

"This decision is based on the need to ensure the supply of grain for the sectors that use it as a raw material for the production of animal protein such as pork, chicken, eggs, milk and cattle, where corn represents a significant component of production costs," a statement from the agriculture ministry said.

Argentina's government is struggling to control food price inflation and help low-income families contending with an economy shrinking during the pandemic. Buyers can still book corn from Argentina, but only for a shipping date 1 March or later.

Russia this month announced a grain export quota and wheat tax as President Vladimir Putin criticized rising food prices.

And major agricultural exporter Brazil has imported staples, including soybeans. Chicago Board of Trade corn futures notched a 6-1/2-year high on Wednesday 30 December after Argentina's announcement.

The South American grains powerhouse is also a big international soybean and wheat supplier, as well as the world's top exporter of soymeal livestock feed.

"To date, 34.23 million tonnes of corn from the 2019/20 season has been authorised for export, out of a exportable total of 38.50 million tonnes," the statement said.

"The objective of the measure is that the remaining 4.27 million tonnes remain available for domestic consumption, in order to ensure the supply during the summer months when the supply of cereal tends to be scarce," it added.

Farmers and other players in Argentina's corn chain traditionally oppose this type of intervention in the markets.

"We are absolutely surprised. It does not make sense. There was never a lack of corn in Argentina," said Alberto Morelli, head of Argentina's MAIZAR corn industry chamber.

Confederaciones Rurales Argentinas (CRA), which represents more than 109,000 agricultural producers, said it was "astonished" by the decision, and noted it had not been consulted first.

"We all understand that ceasing exports is a terrible measure," the group said in a statement. "We all know that if we do not export, no foreign currency enters [the country]," the group said.

International sales of farm products are Argentina's main source of export dollars needed to stabilise the anaemic peso currency and help fund coronavirus relief efforts.

Argentine growers are currently sowing corn for the 2020/21 season. The Rosario grains exchange forecasts a 48 million tonne crop when harvesting begins in April.

Santiago del Solar, a farmer in the bread-basket province of Buenos Aires, called the export suspension a "senseless" move that would damage business confidence.

"Less confidence leads to less production. We have enough corn to supply the domestic chain. This will irritate farmers," del Solar said. "Is wheat next?"

Read more about this story here.

Source: Reuters



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