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Argentina Wheat Exports May Drop to Lowest in Decades

Argentina Wheat Exports Drop to Lowest in 29 Years on Quotas
Wheat sales for the 2009-2010 season in Argentina are primarily from the crop harvested through January 2010, which was curbed by water shortages. Photographer: Diego Giudice/Bloomberg

Jan. 25 (Bloomberg) -- Argentina probably exported the smallest amount of wheat in almost three decades last year amid drought and government restrictions on exports from South America’s largest producer of the grain, an economist said.

Exporters sold about 3.2 million tons of wheat through November, according to data compiled by Lorena D’Angelo, an economist at the Rosario Cereals Exchange, South America’s largest. She said after December sales are included, the total may be the lowest since 3.6 million tons shipped in 1981.

Wheat sales for the 2009-2010 season in Argentina are primarily from the crop harvested through January 2010, which was curbed by water shortages. Exports were also affected by domestic government quotas, requiring farmers to sell about 8 million tons of the grain to local mills, D’Angelo said in a telephone interview today from Rosario.

Harvesting may end this week and will reach 15 million tons after farmers had record yields per hectare, according to a Jan. 20 Buenos Aires Cereals Exchange report. Argentine 2010-2011 wheat exports are expected to more than double to 8.2 million metric tons as the government removed sales restrictions for this year’s crop, the Agriculture Ministry said on Jan. 12.

Farmers’ Protest

Farmers conducted a week-long strike that ended Jan. 23 to demand that the government eliminate restrictions for all future crops and “normalize” grain markets to let them trade freely.

Argentina will move to be the world’s fifth-largest exporter of wheat in the year through June 30, according to estimates by the U.S. Department of Agriculture. Argentina was the eighth-largest wheat exporter the previous year.

The top exporters through the end of June will be the U.S., the European Union, Canada and Australia, according to the USDA.

Wheat for March delivery slid 6.75 cents, or 0.8 percent, to $8.285 a bushel at 9:42 a.m. on the Chicago Board of Trade. Wheat reached its highest price since Aug. 6 yesterday, when it touched $8.395.

To contact the reporter on this story: Rodrigo Orihuela in Buenos Aires at rorihuela@bloomberg.net

To contact the editor on this story: Dale Crofts in Buenos Aires at dcrofts@bloomberg.net

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