BUENOS AIRES: Argentina will plant more wheat this season than last year thanks to farmer-friendly adjustments to the governments export policy and the bad luck that growers had last season with alternative crops such as barley, a key grains exchange said.
At a time of rising world food demand, the grain exporting powerhouse can expect 3.9 million hectares sowed with wheat in the 2013/14 season, up from 3.6 million planted in 2012/13, the Buenos Aires Grains Exchange said on Monday in its first wheat area estimate of the year. Planting starts next month.
"Our survey of growers show a clear improvement in terms of intention to sow wheat," the exchange said in a statement. "This improvement is due primarily to the poor experience that growers had with alternative crops (mostly barley) last season."
A Buenos Aires-based grain trader, who spoke anonymously, said the estimate of 3.9 million hectares of 2013/14 wheat area was "in line with market expectations".
Figures for the previous seasons wheat harvest in Argentina have yet to be finalized, with the exchange estimating a take of 9.8 million tonnes and the United States Department of Agriculture (USDA) putting it at 11 million tonnes.
Argentina restricts wheat and corn exports to ensure ample, affordable domestic food supplies.
Argentina nonetheless suffers from one of the worlds highest inflation rates, estimated by private economists at about 25 percent per year. This, along with strict government-imposed currency controls, has slowed investment in the country's key farm sector.
WHEAT DECLINE ARRESTED
Although 8.3 percent higher than Argentinas 2012/13 wheat planting area, the 3.9 million hectares expected by the exchange for 2013/14 would be 7 percent under the average planting area registered over the last four years.
Farmers have shied from planting wheat and corn the past few seasons since the government started placing export curbs on the two grains. Soy, the countrys main agricultural product, is not subject to the curbs.
The government adjusted its wheat policy this year by announcing the entire seasons exportable surplus at once. It used to issue piecemeal export quotas throughout the season, making it hard for growers to know how much wheat to sow at the start of the crop year.
In early March and well before May planting, the government responded to farmers complaints by announcing a full season export quota of 5 million tonnes. Internal wheat demand in Argentina is about 6 million tonnes.
The retouched policy was "an important factor" in the farmers decision to plant more wheat this season, the exchange said.
More wheat farming would be a step toward improving crop rotation in a country increasingly dedicated to exporting soy and soy byproducts. Argentina is the worlds No. 1 supplier of soymeal animal feed and soyoil, used in making biofuels.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>
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