Poor wheat crop in Argentina, which is expected to limit exports
Argentina is expected to trim the quantity of 2012/2013 wheat destined for overseas shipment to 4.5 million tons from a previous 6 million due to a smaller than forecast harvest, a local newspaper reported on Saturday.
Argentina's government curbs wheat and corn exports to ensure ample and affordable domestic supplies of food.
The wheat harvest in grains powerhouse Argentina will be smaller than expected and of poorer quality this season as farmers slog through waterlogged fields, trying to save their crops from toxic fungi bred by too much rain.
Argentina's government has already advanced exporters that grain giants like Cargill and Bunge will see a reduction in the quantity of export permits to ensure local supply, according to La Nacion newspaper.
The announcement comes at a time when world grain markets are contemplating the risk of prolonged supply tensions. Consumer nations have seen their wheat bills soar this year and Argentine supply has been eyed to help cap prices.
Argentina's government forecasts the 2012/13 wheat crop at 11.1 million tons, recently marked down from 11.5 million.
But with more than 26% of the harvest already collected, yields have been poor, prompting some analysts to reduce their projections for the full crop.