Argentine farmers consider lifting strike under new corn export policy
Argentine farmers may lift the strike they started at midnight as they evaluate a policy announced on Monday that places a temporary 30,000-tonne daily cap on export sales.
The new policy replaces the government’s previous plan to suspend international corn shipments from the world’s No. 3 supplier until March. That original policy was announced on Dec. 30. Farmers hated the proposal and went on a sales strike that started at midnight on Sunday.
The government says it is trying to control domestic food prices amid a long recession and the COVID-19 pandemic.
Farmers and export companies opposed the plan, saying it would lead to cuts in investment, production and inflow of much-needed export dollars as the central bank tries to shore up its foreign currency reserves. Growers and exporters were hunkered down on Monday evaluating the new policy.
The president of the Argentine Agrarian Federation (FAA), Carlos Achetoni, told local radio AM 750 that it was considering lifting the sales strike that farmers had started at midnight to protest the original proposed export suspension.
“We need more details from the government to clear up the doubts we have about the new policy and then decide whether we will lift the strike,” Achetoni said. It was unclear, he said for example, how long the new daily export limit would last.
The CIARA-CEC chamber of Argentine agricultural export companies had no immediate comment on the new corn policy.
The agriculture ministry said the new 30,000-tonne daily limit on corn exports would guarantee domestic supply and cushion local prices against price fluctuations in international markets. This, it said, provided enough stability to allow it to call off the export suspension.
But the private sector in Argentina generally opposes government interventions in the markets, whether it takes the form of an export suspension or a daily limit.
“Grains cargo ships can carry up to 45,000 tonne per loading, so exporting 30,000 tonnes a day would be ridiculous,” said David Hughes, a farmer in the breadbasket province of Buenos Aires.
He said it takes longer to get paid for selling corn in the local market than it does selling to exporters. Considering Argentina’s high inflation rate, Hughes said farmers prefer selling to exporters because they get paid faster.
Hughes and other farmers have said there is no shortage of corn in the country. “Argentina has an ending year corn inventory higher than in the past years, and much higher than the domestic demand,” he said in a text message.
“The terms of purchase of corn on the domestic market pay 30 to 40 days past delivery, and in an environment where last years inflation was 36%, this is not an interesting proposition,” Hughes said. “Farmers are wary of inflation and costs, so in general we have sold to exporters who pay approximately a week after delivery.”
Source: Reuters (Reporting by Maximilian Heath and Hugh Bronstein; Editing by Bernadette Baum and Jonathan Oatis)