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Current Position:Home » News » Food Technology » Sustainability » Topic

Argentina faces corn, wheat shortages

Zoom in font  Zoom out font Published: 2013-10-17  Views: 45
Core Tip: Wheat prices have gone sky high in Argentina, while feedlots and poultry producers say there is not enough corn to go around.
In the last few days the Argentine news media has been focusing on the fact that there does not seem to be enough corn or wheat to go around, which is driving prices higher and causing concern for the users of these grains.

Corn Shortages

On tcornhe corn side, the problem has to do with the “reported” harvest numbers and the “real” harvest numbers. For the 2012/2013 cycle, the Ministry of Agriculture reported 32.1 million tons. The Interior Commerce secretary reported 30.3 million tons. And private estimates put the harvest at between 26 and 28 million tons. Those are significant differences.

Some of the number variations have to do with crop yield estimates. The official government numbers report a yield of 9.5 tons per hectare, while private estimates say the average was more likely 7.6 tons per hectare.

Whatever the true harvest numbers, the reality is that corn users are hard pressed to get their hands on what they need.

One producer who has analyzed the numbers estimates that the corn available to users amounts to1.63 million tons. With a monthly usage of 660,000 tons, that means there are only two and half months of corn supplies left.

That is creating tension in the market. The Argentine Chamber of Feedlots said that corn is quite difficult to get. Poultry producers say that they are also having trouble getting corn, but place the blame on the exporters.

Corn buyers are now paying more. According to a producer, a month ago corn was going for US$ 850 to 900 a ton, with the producer paying the US$ 200 shipping cost. Today, the buyers are paying that shipping cost.

For its part, Maizar, the Argentine Corn and Soy Association, says there is no shortage of corn and it is impossible that Argentine would be left without corn. Maizar indicates that Argentina had a bountiful harvest and that 30.3 million tons is the real number.

Wheat Shortages


Onwheat the wheat side, prices have shot up for new harvest wheat, which is not looking good due to weather issues. The mills are fighting each other for the wheat and so the Argentine wheat prices are among the highest in the world.

WheatPrices for the new harvest, which starts in November, are at US$ 500 per ton for immediate delivery, while in Chicago the price is US$ 250 a ton.

There was a bad 2012/2013 harvest and the new harvest is delayed due to drought and early freezes. This means there is very little wheat left for the users, and therefore the fierce competition in getting supplied.

The Bolsa de Cereales de Buenos Aires estimates that the new harvest will reach 10.35 million tons. The previous harvest was barely 8.2 million tons. Argentina consumes around 6.5 million tons of wheat a year.
 
 
 
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