Buenos Aires – January 01, 2021
Argentina will suspend sales of corn for export until Feb. 28, the agriculture ministry said on Wednesday, announcing the surprise move as part of the government’s effort to ensure ample domestic food supplies.
The move by the world’s No. 3 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,” the statement 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 March 1 or later.
Just to remeber, Russia this month announced a similar action with a grain export quota and wheat tax as President Vladimir Putin criticized rising food prices.
In addiction, major agricultural exporter Brazil has imported staples, including soybeans.
So, in this context, Chicago Board of Trade and Euronext corn futures notched a 6-1/2-year high on Wednesday after this Argentina announcement, confirmed in yesterday session too, the last of the year.
Argentina 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 tons of corn from the 2019/20 season has been authorized 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 tons 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 officially, are opposing this type of intervention in the markets.
“We are absolutely surprised” said Alberto Morelli, head of Argentina’s MAIZAR corn industry chamber.
Confederaciones Rurales Argentinas (CRA), 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.
But, it’s really necessary?
Everyone know that international sales of farm products are Argentina’s main source of export dollars needed to stabilize the anemic peso currency and help fund coronavirus relief efforts.
Argentine growers are currently sowing corn for the 2020/21 season and the Rosario grains exchange forecasts a 48 million ton crop when harvesting begins in April.
Maybe, is wheat next?
