ARGENTINA: Government to reform wheat export quota that farmers say eliminated competition. A similar reform of corn exports is pending

Record ID: 446792

  • Title: ARGENTINA: Government to reform wheat export quota that farmers say eliminated competition. A similar reform of corn exports is pending
  • Date: 7th January 2012
  • Summary: BUENOS AIRES PROVINCE, ARGENTINA (FILE) (ORIGINALLY 4:3) (REUTERS) VARIOUS OF WHEAT FIELDS VARIOUS OF FREIGHTER BEING LOADED WITH GRAINS
  • Embargoed: 22nd January 2012 12:00
  • Keywords:
  • Location: Argentina, Argentina
  • Country: Argentina
  • Topics: Politics
  • Reuters ID: LVA8LJGMW0FN6AJQ5VB0W9XZH303
  • Story Text: Argentina will reform the unpopular wheat export quota system, scrapping incremental quotas to try to improve prices for farmers by boosting competition in the local market, Agriculture Minister Norberto Yauhar said on Thursday (January 5, 2012).
    The government intervenes in wheat and corn trade now by granting export permits bit by bit and subsidizing local millers. This is aimed at guaranteeing affordable food supplies in high-inflation Argentina, a major global grains exporter.
    Officials also set reference prices for crops, but farmers say buyers ignore these and pay less due to restricted demand.
    The new scheme will keep a cap on total exports to ensure sufficient domestic grains supplies, but it will eliminate the gradual quota system in a bid to improve prices for farmers.
    "The agreement is basically that we save the first seven million tons that Argentina needs, basically for Argentine's food. That's how the Argentine government has done it. All the excess, obviously, is completely at the disposition of the producers who can commercialise it however they want," Yauhar told reporters after meeting with wheat industry officials.
    He said the new system will be implemented starting in late January with the announcement of the bulk of remaining 2011/12 wheat export authorizations.
    Argentine farmers are currently harvesting wheat and planting 2011/12 soybeans and corn.
    The minister estimated 2011/12 wheat output at between 13 million and 14 million tonnes, above the government's official estimate of 12 million tonnes.
    Yauhar added a similar measure for corn is pending in Argentina, where experts say some 30 percent of this year's crop has already been lost to drought.
    "The team is starting to work on freeing up the process of corn. It surely won't that different from this deal. What we do have to evaluate is how much there has to be for cattle and feedlots, so the number is going to be a little different. It's not just for food, but other demands our internal market has," Yauhar said.
    Argentina is a leading global supplier of wheat, with neighbouring Brazil topping the list of buyers.
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