MercoPress. South Atlantic News Agency

Half of Argentine 2007/08 crop retained in the farms

The extended Argentine farmers/government conflict, which was triggered in early March when the new sliding export taxes system was announced, and its renewed eight days of protest, have left an estimated 44 million tons of grains and oil seeds unsold, valued in approximately 12 billion US dollars, according to market analysts interviewed by the Buenos Aires press.

The 44 million unsold tons are equivalent to 45% of the 2007/08 harvest which is forecasted to be Argentina's second record with 96.8 million tons equivalent to 25 billion US dollars. Non exported grains will inevitably have an impact for the Argentine government coffers since it will have limited access to collecting the controversial export tax if farmers hold on to their crops. This is particularly true since farmers apparently with the help of plastic silos can store such huge volumes of grains. According to Gustavo Lopez from Agritrend, of the 44 million tons, 75% is soy. Argentina still has to ship overseas an estimated 32 million tons of soy, (some of it already sold but with no price agreed) which at current local prices is equivalent to 9 billion US dollars. The country's total soy crop is expected to reach 48 million tons of which 14 million still are waiting to be harvested. Ricardo Baccarin from Panagricola argues that given the current uncertainty in the grains market, and situation, farmers are holding on to their soy crops "which is the most valuable". "They've decided to sell what they need to face current expenditures and the rest they are holding on to; we could be facing a historic year in so far as crop retention is concerned", added Baccarin. Normally at this time of the year daily transactions in the area of Rosario (Argentina's main soy bean hub) "are in the range of 100 to 200.000 tons of soy, but currently it's down to 10 to 30.000 tons". Lopez revealed that an estimated 51 million tons of the current crop have been commercialized, and even when soy beans retention is as high as 75%, "most of corn and wheat has been traded. Of the 16 million tons of wheat possibly 4.2 million tons remain unsold". Regarding corn, of a crop of 21 million tons, 10.4 million tons have been traded and exporters have registered sales for 10.7 million tons. Argentina's domestic consumption is 7.8 million tons. Nevertheless grain traders are fearful because last year the Kirchner administration clamped exports when the overseas registry reached 10.5 million tons. Lopez says that 25 million tons, (14 million of soy and 11 million of corn, sorghum and others) still have to be harvested. And how do farmers store such huge volumes? Apparently plastic portable silos with minimum units of 200 tons and which can stand a whole year has become the most common resource in current circumstances. "The plastic silos are a good strategy for tough moments and uncertainty" said representatives from a company which specializes in selling these products. Apparently business has been booming and sales of plastic silos could store well above 40 million tons. "That's where most of the crop should be now", added Lopez. This also means a huge improvement from the 2003/04 harvest when plastic silos helped store 12 million tons. Companies admitted this has become a "90 million US dollars business per crop". Provincial authorities' sources from Cordoba estimated that Argentine farmers could be holding on to grains and oil seeds valued at almost 20 billion US dollars.