By Maximiliano Heath
BUENOS AIRES (Reuters) – Argentina’s government will announce measures within days to allow wheat exporters to withhold agreed shipments after a primary drought hit the harvest, raising concerns about domestic supply.
A source from the country’s CEC grain exporting chamber, which represents the corporations that buy the grain, said measures will be launched “in the coming days” to allow corporations to reschedule agreed wheat exports by incurring the general fine of 15% by the authorities.
A government source with direct knowledge of the matter said measures to allow delays in wheat shipments were “likely. “”It’s under consideration,” the source said.
The comments are the most powerful indication yet that Argentina, one of the world’s most sensible wheat exporters, will seek to curb grain exports amid a drought that threatens to cause the worst harvest in nearly a decade.
The CEC source called for immediate action on the plan. “If the government does it, let it do it now, because we have to turn around and communicate to consumers in Indonesia, Morocco, Algeria, Egypt and tell them that our wheat has burned. “and renegotiate those contracts,” the user said.
The move may further increase global costs, after dry weather hit manufacturers in the U. S. The U. S. invasion of Ukraine will slow down shipments. Russia and Ukraine are two of the main manufacturers of wheat, which is used for cereals and bread.
The Argentine government met with millers and wheat exporters in October to discuss drought-affected crop considerations, with pressure from millers expanding to more sources for the domestic market.
Rosario’s main grain exchange cut Argentina’s forecast for Argentina’s 2022/23 wheat crop to 13. 7 million tonnes, which would be the country’s lowest in seven years and well below 23 million tonnes in 2021/22.
The country’s producers have already officially reported 2022/23 wheat sales of 8. 9 million tonnes, according to official data. Argentina’s domestic wheat intake for the 2021/22 harvest amounted to 7. 6 million tonnes.
Some 2 million tonnes of wheat have been unsold since 2021/22. There is an export cap of 10 million tonnes for the 2022/23 wheat crop.
Diego Cifarelli, head of Argentina’s milling industry framework FAIM, told Reuters the sector was “concerned” about the source and showed talks with the government about possible delays in shipments.
He said, however, that if there were no more wheat losses, demand could be met, and shortages could increase costs.
(Reporting via Maximilian Heath; Editing by Adam Jourdan and Jan Harvey)
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