Argentina will approve at least three million tonnes more in 2012/13 corn exports over the weeks ahead, Agriculture Secretary Lorenzo Basso said on Friday, good news for consumer nations hit by high prices caused by thin global supplies.
The government in Argentina – the world's No. 3 corn exporter – controls wheat and corn exports through a quota system designed to guarantee ample and affordable local food supplies, a policy that is unpopular with growers.
Forecasting a harvest of at least 26 million tonnes, Mr. Basso said the additional export quota will be granted late this month or in February, once the government has a more accurate forecast for overall production.
The government has already freed 15 million tonnes of 2012/13 corn for export and eight million tonnes is needed for domestic consumption.
"We will have to open at least three million tonnes more," Mr. Basso told Reuters in a telephone interview from Berlin, where he was attending an agricultural conference. "I estimate that we will announce the increased quota this month or next."
Poorer countries concerned about the price of basic staples are counting on Argentina to help compensate for last year's poor corn crop in No. 1 supplier, the United States. Corn is used in food production and livestock feed. So high corn prices could drive up prices for a variety of foods, including meat.
Benchmark Chicago corn futures are up 22.6 per cent over the last 12 months, having risen 4 per cent in January alone.
The United States Department of Agriculture forecasts an Argentine crop of 28 million tonnes. To reach that target, the South American country needs rain before the end of this month.
Corn plants in the Pampas farm belt must have moisture at this point in the season to help them flower. This stage is key to developing healthy yields. Meteorologists however see nothing but blue skies and some light, scattered showers on the horizon.
"There will not be the important amounts of rainfall through the month of January that farmers want to receive," said Anthony Deane of consultancy Weather Wise Argentine.
The season started with the opposite problem, when unusually harsh August through mid-December rains flooded wide swathes of the corn belt. Seeding machines got stuck in the Pampas mud and some of the low-lying fields that did get planted were promptly attacked by toxic water-born fungi.
"Some areas were lost to flooding," Mr. Basso said. "But we are sure to harvest at least 26 million tonnes of corn this year."
Global food prices are meanwhile expected to remain high in 2013 as low stocks pose the risk of sharp increases if crops fail, the United Nations warned this month.