Argentina to produce up to 22mt corn in 2012

Argentina is unlikely to sell large volumes of corn to China this year, despite a recent deal between the two countries on trading the grain, due to a lower-than-expected output, an Argentine trader said on Wednesday. A long dry spell this year has raised questions about how much corn would be available for export from Argentina, the No. 2 global supplier after the United States. Supply concerns have pushed Chicago Board of Trade benchmark corn prices to their highest since January this week. “This year we don’t see any corn exports to China, maybe one cargo just to prove that the relationship is working,” Freddy Pranteda, director of grains and oilseeds desk at Buenos Aires-based brokerage Cosur, told reporters on the sidelines of an industry conference in Singapore. In February, Argentina’s farm minister announced an agreement on “a protocol through which all the derivatives of our corn can enter the Chinese market, which was not the case previously”. Argentina was earlier expected to produce 28 to 30 million tonnes of corn this year, but because of the drought, output may come in at up to 22 million tonnes, Pranteda said. This would leave the country with 13-14 million tonnes for exports to mainly its traditional customers, he added. “In the future it is possible (to sell large volumes) as China has done a lot of work to certify Argentine corn.” Cosur is one of the largest Argentine brokerages, handling 13 million tonnes of grains, oilseeds and vegetable oils annually. Argentina is the world’s second-biggest corn supplier after the United States. Rumors swirled earlier in 2011 that China had bought Argentine corn. Genetically modified strains account for about 80 per cent of the South American country’s corn production, reached a record 26 million tonnes in the crop season. “A sanitary protocol is being discussed that would give our country access to the Chinese market,” Argentine Agriculture Minister Julian Dominguez said in a statement after talks with Chinese officials. Strong domestic prices and low reserves are likely to force China to import more US corn this year, squeezing tight world supplies, analysts and industry officials said on Wednesday. China’s corn imports are expected to more than double in the current 2011/12 crop year to 4 million tonnes from 1.5 million a year earlier, a senior official at a state-run company said at an industry conference in Singapore. Excessive rains in the country’s northern corn belt last year reduced the quality of the domestic crop, helping to push Chinese corn prices more than 7 percent higher so far this year. Inflation Argentina’s official inflation was 0.7 per cent in February, slowing from the previous month, the government said on Tuesday. The country’s inflation figures are widely disputed and private economists estimate consumer prices really rose by 1.7 per cent last month, according to the median in a poll. January’s inflation was 0.9 per cent. The Indec statistics agency said 12-month inflation through February was 9.7 per cent, unchanged from a month earlier but far below the roughly 25 per cent seen by independent economists, which would make it one of the region’s highest rates. Indec said the top price gains in February were in the heavily weighted food and drink sector, up 1.3 per cent, and “other goods and services,” which climbed 1.5 per cent. Analysts, renegade state statistics workers and opposition politicians accuse the government of underestimating rising consumer prices for the last five years, in part to lower payments on inflation-linked debt. Officials deny that and defend the government data. The vast difference between official and private figures prompted a government crackdown that includes heavy fines on economists who dare to release their own inflation estimates. To protect local consultants from retaliation, opposition   lawmakers have been releasing the independent estimates, which   serve as a key reference point for wage hikes. In December 2001, Argentina defaulted on $100 billion in debt - the largest default in history. The move ushered in an era of utter chaos: five presidents in two weeks, cash and food shortages, deadly riots and dire poverty. According to analysts, the crash occurred because of Argentina’s enormous debt load, high public spending and overvalued currency. Greece now carries similar burdens, which has led some observers to suggest that Greece should follow Argentina’s example and default and devalue.With protests still under way in Athens, Greece’s future remains murky, but in Buenos Aires, the decade since Argentina’s economic collapse has been nothing short of remarkable.