Argentina’s trade hurries to register wheat as export fears mount

Exporters and traders have accelerated wheat export registrations from Argentina as concern mounts that the government could again suspend the authorisation of export licenses, following several weeks of mounting chaos in the country’s logistics and the suspension of old corn export licenses in late December.

Traders have registered 1.43 million mt of wheat in the two working days since the start of the new calendar year, including 730,190 mt booked on January 5. 

This is 38% higher than the total registrations made during the November-December period, and a huge increase compared with the same period of 2020, when export registrations only reached 1.4 million mt by the end of April.

Meanwhile, the total wheat new crop volume registered for export has already reached 7.2 million mt, while the Rosario Board of Trade (BCR) estimates the country will export 9.6 million mt over the current marketing year, leaving little surplus for future exports.

“The trade is afraid of a new government restriction in wheat,” one broker said, adding that there is no official decision on that yet.

“Some have started accelerating new crop licenses just in case. It’s a possibility, although there’s nothing concrete. Next week there’s a meeting with exporters, local millers and the government, some kind of intervention is expected, but I believe the government will try to avoid a major restriction,” an Argentina-based source said.

The increase in registrations, along with overall market sentiment, pushed wheat offers around $3/mt higher in Argentina’s FOB Up River market, to reach $261-$262/mt for February loading.

Wheat is a socially important product, and the increase in prices comes as the country is already wrestling with rampant inflation.

Further price rises could trigger even more inflationary pressure, and authorities in originating countries all over the world have sought to impose restrictive measures for exports in a bid to try and avoid further domestic price increases and hold on to sufficient stocks.

At the end of December, Argentina’s government closed the registry for any corn export registrations dated prior to March 1, the start of a new marketing year, citing worries that the current active export pace and international prices challenged the security of domestic supply.

Alongside that, the country has suffered repeated disruption to logistics as a series of labour disputes affected crush, port and grain export workers, while rural groups have threatened to block sales of grains in protest at the closure of the old crop corn export registry.