Argentina announced this week the reopening the wheat and corn export registries, a measure that had an immediate impact in the US markets of Chicago and Kansas City.
The Kirchner administrations had tightened control over exports of both grains as a way to safeguard domestic supplies and tame rising food prices in the country. Argentina is the world's No. 4 wheat exporter and No. 2 corn supplier. Argentina is also the world's third-biggest soybean exporter. Harsh frosts in November raised concerns that 2007/08 wheat production could be dramatically reduced. But now, with the harvest over, the Agriculture Secretariat said it had decided about 2 million tons could still be exported. "The new regulation of wheat (export declarations) seeks to guarantee an orderly supply to the market and, through free competition between exporters and millers, produce a better price for the wheat farmer" an Agriculture Secretariat statement said, adding the reopening would be effective as from today Thursday. Farmers have called on the Argentine government in recent weeks to normalize wheat exports, saying the registry's closure was driving down prices in the domestic market. Wheat prices had begun to increase in Argentine grains ports this week due to increased speculation the registry would be opened. Under the measure wheat exports will be limited to 400,000 tons per month, with individual export firms being limited to a daily maximum of 12,000 tons, the secretariat said. The US Department of Agriculture (USDA) estimates Argentina's 2007/08 harvest at 15 million tons, with exports seen at 10 million tons, down slightly from 2006/07 exports of 10.5 million tons when production was 15.2 million tons. Just over 7 million tons of the grain has been registered for export this season, according to the latest government figures. Brazil is the country's biggest customer. Also this week Brazil's government postponed a decision on whether to lower the tariff on imported wheat from outside Mercosur after Argentina signaled it would begin exporting the grain again. Wheat from countries outside Mercosur is currently charged a 10% tax to enter the Brazilian market. Wheat mills in Brazil had demanded the reduction of the tariff after Argentina suspended wheat export permits. In relation to corn Argentina said exporters would be able to register exports for shipments starting from February 15, when the 2007/08 harvest will be in full swing. Corn shipments will have to take place within 30 days of the registry date. At the moment, farmers are sowing the last of the corn crop, which has been hit by dry weather. USDA estimates production of 22.5 million tons with exports at 16 million tons. Corn exports were closed in November 2006, (to help contain local prices of poultry and hog) though the government temporarily opened the registry last May for another 3 million tons of the 2006/07 crop, which was a record 22.5 million tons, according to USDA figures.
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