Tuesday, February 27, 2024

ECONOMY | 13-10-2022 16:49

Argentina mulls tighter wheat export controls as crop withers

Argentina is considering tightening the screws on wheat exports as a drought withers plants.

Argentina is considering tightening the screws on wheat exports as a drought withers plants that are harvested at year-end and food inflation spirals, according to people with knowledge of the matter.

The government has convened a meeting with exporters because of concerns among domestic millers that there won’t be enough wheat available locally, said the people, who asked not to be identified discussing confidential emails.

A brutal season of drought and frosts appears to be forcing the government’s hand as it juggles efforts to shield local consumers from surging prices with the need to replenish hard currency reserves. Further restrictions on Argentine wheat would add to global tightness with US exports at the lowest in 50 years and the war in Ukraine continuing to hamper shipments.

The Agriculture Secretariat didn’t immediately comment. The nation’s crop export and crushing group Ciara-Cec confirmed the government had convened a meeting amid worries by millers.

Authorities want to discuss what can be done to ease demand from international buyers, including pushing back shipments of 8.8 million metric tons of wheat already on an official crop-export register. Another option would be to stop traders from surpassing nine million tons on the register until the extent of production losses is fully known.

Argentina – a top-seven global wheat supplier whose biggest customer is neighbouring Brazil – previously applied an export quota to the 2022-2023 harvest of 10 million tons. 

The Rosario Board of Trade, which once predicted a crop of 19 million tons, now says plants will yield less than 16 million tons.

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by Tarso Veloso & Jonathan Gilbert, Bloomberg


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