The Argentine government has signed a deal with corn exporters authorizing the first tranche of exports from the 2010-11 corn crop, agreeing to allow 5 million metric tons to be shipped starting Feb. 15, the national farm trade office, or Oncca, said in a press release Wednesday.
Argentina, the world's second-largest corn exporter behind the U.S., tightly regulates corn and wheat exports, granting export permits only after domestic stocks have been covered.
According to the Agriculture Ministry, Argentina's corn production is set to hit a record 26 million tons. That would be up sharply from the 22.5 million tons grown last year, according to the U.S. Department of Agriculture.
If that production is confirmed, Argentina will likely end up exporting around 18 million tons of corn from the crop after 8 million tons is set aside for domestic use, according to the ministry. However, with dry weather expected in the following months due to the La Nina weather phenomenon, there are growing doubts over whether output will reach the levels initially forecast.
During 2009, the top buyers of Argentine corn exports were Iran, Algeria, Colombia, Egypt and Peru. The government is currently in talks to open corn exports to China. China has traditionally been a big corn exporter, but drought problems last season and soaring demand led China to import this year.
However, Argentina and China first have to first settle a phytosanitary agreement on acceptable strains of genetically modified corn, which is likely to be wrapped up in the fist half of 2011, Agriculture Minister Julian Dominguez said during a trade mission to Beijing on Wednesday.
Analysts have estimated that China may need to import 5 million tons of corn from Argentina. But China has reaped a good harvest of corn recently, which may reduce the demand for imports. China has so far imported about 1.5 million tons of corn this year.
In addition, Russia is looking to buy 3 million metric tons of corn from Argentina next year to make up for this season's drought shortfall, Argentina's International Trade Secretary Luis Maria Kreckler said last month.
Opening up Russia's market to the transgenic corn strains Argentina grows must also be negotiated. If approved, the first shipment is expected in January, according to Kreckler. That would mark the first export of Argentine corn to Russia since the 1980s.
