Argentina works to ensure ample domestic wheat supply amid export cap rumors

The government, worried about domestic food price inflation, tried to limit corn exports

  

BUENOS AIRES- Argentina's export companies' chamber said on Wednesday that discussions were being held with farmers, millers and the government over measures aimed at ensuring ample domestic wheat supply amid rumors of a possible cap being placed on exports.

The government, worried about domestic food price inflation, tried to limit corn exports earlier this month but proposals for doing so were beaten back by growers and exporters. Now the focus is on wheat, with rumors flying around the Pampas grains belt that an export cap might be on the way.

"We will have a meeting today with the wheat value chain, including farmers, grains handlers and millers. We will see if we can develop options," Gustavo Idigoras, head of Argentina's CEC agricultural export companies' chamber, told Reuters.

"We will also meet over the coming days with the government. They do not want to intervene in the market or limit wheat exports, but everything is on the table," Idigoras said.

An agriculture ministry spokesman declined to comment.

Argentina is the world's No. 7 international wheat supplier, with most exports going to neighboring Brazil. The agriculture ministry says that of the 17.2 million tonnes of 2020/21 wheat recently harvested, 10 million tonnes will be exported. Official data also show that exporters have already bought 8.9 million tonnes of 2020/21 wheat.

The agriculture ministry recently proposed a two-month suspension of corn exports and then a daily limit on international shipments. It ditched both plans following objections from exporters and farmers who said the move would be bad for investment and production.

But the proposals themselves showed Argentina may resort to export limits in a bid to slow increases in domestic food prices. The country's overall consumer price inflation rate was 4% in December alone, further punishing families already hit by a long recession exacerbated by the COVID-19 pandemic.

"Traders and the government are for sure talking about limiting wheat exports to one extent or another," a farmer in the bread basket province of Buenos Aires said, asking not to be named due to the sensitivity of the issue.

(Reporting by Hugh Bronstein and Maximilian Heath; Editing by Kirsten Donovan) ((hugh.bronstein@thomsonreuters.com; 5411 4318 0655; Reuters Messaging: hugh.bronstein.thomsonreuters.com@reuters.net))

More From Commodities