BUENOS AIRES, March 18 (Reuters) – Argentine farmers are racing to sell their corn stockpiles at a record pace after the new government ditched years-old export controls, unleashing fresh supplies onto a saturated global market and potentially hurting prices.
Due to a surge in late-season planting, Argentina’s usual corn export window will be delayed by two months into August, providing further competition for U.S. growers already pressured by the strong U.S. dollar and supplies from top South American grower Brazil.
This could restrain U.S. corn prices which have risen 2.58 percent this year to US$368.25 per bushel.
Argentine growers planted more than expected corn late last year when it started looking likely that free-markets proponent Mauricio Macri would beat early front-runner Daniel Scioli in November’s presidential election.
When he took office in December, Macri eliminated grains export taxes and ditched the quota system that the previous government used to control international corn shipments.
Only about 30 percent of the 2015-16 crop was planted early versus the usual 60 percent, said Martin Fraguio, executive director of corn industry chamber Maizar.
“So rather than having an April, May, June export season we’re going to have a June, July, August export season,” he said. “This season almost no one planted early corn because people thought that Scioli was going to win and that he would retain the export tax on corn and the export quota system.”
Farmers sold huge amounts of the corn reserves after Macri prompted a 30-percent peso devaluation in December by lifting currency controls, making Argentine corn exports more profitable in the local currency.
January corn exports grew to 1.780 million tonnes versus 1.015 million in January 2015, according to Argentine customs data. February exports jumped to 2.120 million tonnes from 778,267 tonnes in the same month last year.
This eroded U.S. market share early in the calendar year, a period when America is typically the dominant exporter.
Shipments from Argentina will battle for business against Brazil’s sizable safrinha crop in the months ahead though. U.S. exports are meanwhile down some 20 percent year-on-year due to heightened competition.
Traders said Argentine growers have some stockpiles left to sell. The government does not release crop carryover data.
“And they’re starting to deliver their new corn crop. So March will be another record export month,” said a Buenos Aires-based export executive who spoke anonymously. “Early vessels this month have been loaded with old crop material.”
The U.S. Department of Agriculture expects Argentina to export 17 million tonnes from the 2015-16 season, 1.5 million less than in 2014-15.
