Argentina's corn export market remains 'open' despite a new government policy that prioritises crops that are already harvested over forward sales of the upcoming crop, the agriculture ministry said.
The 2021/22 crop is currently being planted in the world's second biggest corn exporting country. The government said it wants to sell last season's corn before approving more exports of the upcoming crop, which will not start to be harvested for another five months.
Of the 55 million tonnes of corn expected by the Buenos Aires Grains Exchange to be harvested next season, a record 38.5 million have been sold, according to government data.
Farmers have been rushing to lock in high international prices while their costs are pushed up by chronically high inflation.
"Argentina is heading to export a historical volume of corn, higher than any previous one," the ministry said in a statement.
"Exports are open."
Farmers however called the policy, which was announced on Monday, an unnecessary intervention in the free market.
The country's four main farming groups, banded under the CEEA umbrella organisation, issued a statement on Tuesday saying it was "concerned."
'Regain Market Transparency'
"The sector needs to regain market transparency if confidence is to be restored," it said, adding that growers have complained for months about what they call de-facto restrictions on grains exports aimed at controlling domestic food price increases ahead of the November congressional election.
Inflation is running at almost 50% per year, as Argentina's economy pulls out of a long recession exacerbated by COVID-19.
The ruling Peronist coalition got thumped in the midterm primary last month, exposing internal rifts and putting the agenda of center-left President Alberto Fernandez at risk.
The Peronists have historically clashed with farmers. Earlier this year the government temporarily imposed quotas on corn exports and threatened to raise taxes on wheat shipments, triggering protests.
The CIARA-CEC chamber of export companies said on Tuesday that the new policy did not mark a closing of exports but rather a move to prioritise already-harvested corn for international sale.
The ministry "has the authority to" regulate the market in this way, CIARA-CEC chief Gustavo Idigoras told Reuters.
News by Reuters, edited by ESM. For more Supply Chain news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.