Arg. corn trade to guarantee domestic supply in bid to restart exports

Argentina’s farming sector has offered an olive branch to the national government in a bid to cool mounting tensions around the government’s decision to close down export registrations for all old crop corn sales for loading in January and February, Alberto Morelli, president of Argentine corn group Maizar, told Agricensus.

The proposal offers to guarantee the supply of corn to the domestic market in return for authorities re-opening the export registry as the sector looks to capitalise on high global corn prices and repair some of the damage done to trading relations among some of Argentina’s biggest customers.

“We expressed the commitment of the private sector that there would not be any shortage of corn for the domestic market in the coming months and we will work with specific sectors experiencing any issue to obtain corn,” Morelli said.

Currently, corn can only be exported from March 1 onwards, when the new crop is expected to come to the market.

The executive also said that the sector has also proposed to work on specific financing options to avoid bottlenecks in the supply of corn in the domestic market and enable local demand centres to buy corn with new financing tools.

“The Ministry of Agriculture received our proposal and they told us that they will analyse it. We will see if we have positive results,” Morelli said.

The alternative has been a threat from the sector to bring about a total shutdown in Argentina’s grain sector if the export registry is not re-opened to old crop corn sales. 

According to a statement from the agriculture ministry, the private sector has committed to guarantee smooth commercialization of the grains, taking into account the needs of demand, internal supply and prices and to mitigate the effects of sudden changes in international prices that could impact consumption. 

The industry has also undertaken to promote easier access to production.

On December 30, Argentina’s agriculture ministry temporarily suspended the registration of foreign export sales for corn with a shipment start date prior to March 1, 2021 – the start of the new 2020/21 campaign, in a bid to safeguard the remaining 4.27 million mt of 2019/20 corn for domestic consumption.

The country’s four main lobby groups strongly opposed the decision, claiming in a statement that the export ban “prevents the entry of foreign currency into the country,” and warning that it could impact production costs and call into question farmers’ intentions to plant corn or other products.

Agriculture Minister Luis Basterra noted that the understanding with the private sector “places us in different conditions than in previous weeks.”

“The Ministry of Agriculture advanced in an understanding with the representatives of the Agroindustrial Council (CAA), with the aim of guaranteeing the internal supply of corn for the national sectors that require cereal as an input to produce and sustain affordable price levels for Argentines throughout the national territory,” a statement from the ministry said.

The ministry also confirmed that it will carry out an evaluation of the expected volumes to determine if the decision to reopen the registry for export is viable.

According to private estimates, there is a stock of more than 8 million mt of corn in the domestic market, a volume more than enough to supply the 3.46 million mt required by the domestic market during January and February.

With Argentine logistics paralysed by a raft of domestic labour disputes in recent weeks, the closure of the export registry has been a key factor in driving major customers such as Vietnam, North Africa and Middle East destinations to pick up supply from alternative origins, including the Black Sea, Myanmar and India.