Jan 14, 2021

Argentina Lifts Export Restrictions

Country remains dependent on ag exports to support its economy

Argentina Lifts Export Restrictions

  • The agriculture ministry has lifted a 30,000 tonne per day limit recently placed on corn exports.
  • The limit was intended to replace a complete ban on corn exports through February.
  • The government said the curb was intended to ensure domestic food supplies and stable prices for corn users.
  • Farmers started a sales strike on Monday to protest the ban, and kept it up as the cap was put in place.
  • Argentina's three main growers' organizations called off the strike after negotiations with the ag ministry.
  • The government agreed to cease the daily export limit and formed a commission to monitor domestic corn prices.

FBN’s Take On What It Means: There was always a question as to whether an export ban or even limit could work in Argentina, as the country remains dependent on ag exports to support its economy. The three day strike had no effect on Argentina’s exports, which are expected to continue on pace. However, the situation does point up the current tightness in supplies and that there is little room for declines in production for the new crop.

Russia Proposes Export Tax For Wheat, Barley, and Corn

  • Russia’s agriculture ministry confirmed rumors that it is considering raising the wheat export tax with the current proposal at 45 euros per tonne, up from the current level at 25 euros.
  • The current tax is set to start February 15 with the higher proposed tax set to start March 15, if approved.
  • The ministry also proposed a barley export tax at 10 euros per tonne and a corn export tax at 25 euros per tonne.
  • The new proposals are scheduled to be reviewed on January 15.
  • Russia is the world’s largest wheat exporter and second largest barley exporter, following behind the EU.
  • The current wheat export hike appears to have not been sufficient enough to discourage domestic prices from rising.

FBN’s Take On What It Means: These proposals, if approved, will benefit other wheat export origins. Likely, the outcome will again be higher FOB values as countries continue to need to source feed grains and food grains. Russia’s rising domestic prices are not a result of tight domestic supplies but rather a result of rising global demand.

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Kevin McNew

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Marketwatch: Jan, 18

US Corn Price Idx: ZCPAUS.CM

open: 5.7667
high: 5.8486
low: 5.7266
close: 5.8288

US Soybean Price Idx: ZSPAUS.CM

open: 13.366
high: 13.376
low: 13.2328
close: 13.2696

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 7.3061
high: 7.3384
low: 7.2334
close: 7.2454

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.0114
high: 7.0566
low: 6.9566
close: 7.0014