Argentina predicts record crop yields
Buenos Aires (UPI) Nov 9, 2010
Argentina expects its corn and wheat crop yields this year to exceed expectations, adding to recent improvements in outlook for soya exports to China, that were suspended earlier this year over a contamination row.
Officials said both corn and wheat were headed for record yields. Estimates for the 2010-11 season suggest Argentina may end up with a 5.5 million ton wheat surplus and a corn surplus thrice that size.
Argentine President Cristina Fernandez de Kirchner is under growing pressure to reform the country's agriculture policies, including controversial taxation laws that caused widespread protests in 2009 and hit her approval ratings.
The Oct. 27 death of her husband and former president Nestor Kirchner, a key player in his wife's policymaking, led to speculation that Fernandez might order an overhaul of policies that risk costing her the presidency if she runs for re-election next year.
One of the reforms already announced but still in early stages involves coordination of all agricultural output data. Agriculture Minister Julian Dominguez and other senior officials said they would be looking to institutionalize a system of agricultural data, including reports from cereals and oilseeds markets, various ministries and agriculture schools, in an effort to present a coherent picture of Argentina's agriculture industry.
Dominguez said wheat output could total 14 million tons, according to conservative estimates, but could also exceed that figure. Out of that figure, he said, Argentina would be left with at least 5.5 million tons available for export.
As for corn, he said, the crop is estimated to be around 26 million tons leaving Argentina with an export surplus of 18.5 million tons.
Other crop yields cited by officials include 1.6 million tons of rice, 1.7 million tons of beer barley, 4.15 million tons of sorghum, 2.5 million tons of sunflower and 52 million tons of soybeans.
The high yields and their export potential were announced as Argentine export officials prepared for a follow-up to the July visit to China by Fernandez. In that visit the Argentine leader was able to ease Chinese fears over the quality of Argentine soya exports and secure an end to a Chinese suspension of soya imports from the Latin American country.
Argentina hopes it can interest China in boosting trade in beef, barley, wine and dairy products.
Kirchner's death has divided analysts over Argentina's future economic outlook, with some industry sources quoted in the media predicting Fernandez may not cope well with economic and financial management. Fernandez loyalists argue Kirchner's departure gives the president a freer hand.
Fernandez hailed financial figures showing unemployment fell from 9.1 percent last year to 7.6 percent this year. Opposition critics questioned the data, saying job gains could be inflated for political gain.
The outlook on the investment front is murky, however. Argentina is rated six levels below investment grade at B3 by Moody's Investors Service. Standard & Poor's raised the rating one level to B in September, matching a July increase by Fitch Ratings.
Industry analysts said Argentina could qualify for an upgrade but persistent skepticism about the quality of its economic data remained a disincentive for investment advisory services, including the ratings agencies.
Moody's hasn't changed Argentina's rating since 2005, when the country reached an initial restructuring settlement following its 2001 default on $95 billion of sovereign bonds.
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