Record Argentine soy crop to pump exports despite hoarding

Mon Mar 24, 2014 8:07am EDT
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By Hugh Bronstein

BUENOS AIRES (Reuters) - Argentina will put downward pressure on world food prices by exporting more soy this year, even as growers hedge against the country's dysfunctional financial system by hoarding a bigger chunk of what is expected to be a record high crop.

The biggest harvest ever seen on the Pampas farm belt started last week, setting the stage for increased exports from the world's No. 3 soybean supplier. The size of the expected crop increase will at the same time allow growers to stockpile a larger percentage of the crop than last year.

Farmers are hanging onto their soybeans to use as a unit of savings preferable to Argentina's anemic peso, which has weakened by 18.2 percent this year. They use beans to barter for everything from seeds to pickup trucks, restricting supply and supporting international soy prices over the last year.

"Farmers will sell more volume of soybeans this season. But because the harvest is expected to be so much bigger than it was last year, sales will represent a lower percentage of the overall crop," said Pablo Adreani, head of AgriPAC consultants.

He expects sales of 20.75 million metric tons for March through May, or 38 percent of total projected 2013/14 production compared with 22.19 million metric tons in the same three month period last year, which represented 47 percent of Argentina's total 2012/13 soybean harvest.

In March-May 2012, Adreani's research shows growers sold 26.47 million metric tons, or 68 percent of 2011/12 production.

Despite being a top source of soy and corn used as animal feed as far away as Asia, where an emerging middle class wants more beef and chicken in its diet, Argentina's economy has been pounded down by one of the world's highest inflation rates.

The trend of growers hoarding crops to compensate for financial uncertainty has been more than matched however by soy production increases made possible about by Argentina's all-out embrace of yield-bolstering genetic seed technology.   Continued...

Soybeans are seen at the back of a harvester at a field in the city of Chacabuco April 24, 2013. REUTERS/Enrique Marcarian