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Argentine corn sales pick up on concern over possible export limits

Argentine farmers have dramatically accelerated sales from the upcoming 2020/21 corn harvest, due to concern that the government may yet again try to limit international sales.

The agriculture ministry has caused uncertainty by going back and forth in recent weeks on policies seeking to ensure ample food supplies by limiting international shipments of corn. Argentina is the world’s No. 3 exporter of the grain.

Between January 7 and 13, producers sold 1.07 million tonnes of 2020/21 corn to exporters, up from 334,300 tonnes in the same period last year, according to Ministry of Agriculture data.

The higher-than-normal sales have also been motivated by high prices caused by low supply from other exporting countries.

In the last week of December, just before the government first said it would put a hold on exports, a policy that was soon abandoned, farmers sold 104,000 tonnes of corn.

The agriculture ministry proposed a two-month suspension of exports and then a daily limit on international shipments, ditching both plans following objections from farmers and exporters.

But the proposals themselves showed Argentina may resort to export limits in a bid to slow increases in domestic food prices. The country’s overall consumer price inflation rate was 4% in December alone.

“Corn has an excellent price and we are checking expected yields, which are looking good. Given these two variables, plus all the talk about the government closing exports, we are selling a good proportion of our new crop,” said David Hughes, a farmer in the bread-basket province of Buenos Aires.

Chicago Board of Trade corn futures, the global benchmark, hit their highest point since June 2013 last week after the U.S. Department of Agriculture slashed its supply outlook and as concerns about supplies intensified.

Rising global grain costs have stoked worries about food price inflation, prompting top wheat supplier Russia to restrict its exports. Ukraine has also considered export curbs.

Argentine growers say government-imposed export limits put downward pressure on investment and production. Argentine corn starts getting planted in September with harvesting in April-June.

“Interventionist measures do not work,” Jorge Chemes, president of the Argentine Rural Association, or CRA, told Reuters. “There is fear that the government will enact new measures aimed at increasing the domestic supply of corn, and that it might try to do the same with wheat and beef.”
Source: Reuters (Reporting by Maximilian Heath and Hugh Bronstein in Buenos Aires, Karl Plume in Chicago; editing by John Stonestreet)

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