More Argentine farmers than usual are expected to delay planting corn this season, preferring to await the outcome of this month's presidential election for clues on whether there will be changes to quotas and hefty export taxes on grains and cereals. Ruling party candidate Daniel Scioli has given scant details on agricultural policy, while two leading opponents promise to cut the duties and scrap the trade barriers farmers say eat into profits because they force local prices lower.
The decision by farmers to hold back from planting increases uncertainty over the size of the 2015/16 crop in Argentina, the world's fourth biggest exporter of corn. Both a bumper crop or a small harvest could impact corn prices internationally. "Most likely there will be more late planting this season because many producers will make the decision in late October, November or even December," said Copati Esteban, chief analyst at the Buenos Aires Grains Exchange.
The exchange is already forecasting that the 2015/16 corn planting area will fall to 2.7 million hectares from last season's 3.4 million hectares as the uncertain political outlook pushes farmers toward sowing soy, which is cheaper to produce. Opinion polls show Scioli is just short of the support needed to win outright in the first round of the election on October 25, raising the prospect of a tight run-off in late November if the opposition unites. That would most likely be against market-favourite Mauricio Macri.
The late planting of corn - a growing trend in Argentina - minimises the risk of exposure to dry bouts of weather during the key phase of crop development while yields tend to fall only slightly. "We'll wait to December before we plant, so that we can see what happens. Maybe at that point we'll feel more enthusiastic about corn," said Daniel Christiansen who farms in the Santa Fe province, in the heart of Argentina's grains belt.
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