Process Management

News 153 views last update:6 Aug 2012

Argentine grain output seen higher

Argentina could increase its annual grain production to 120 million tonnes by 2010 from about 90 million tonnes currently, a top executive of one of the country's top soy producers said.

Argentina, the world's No. 3 producer and exporter of soybeans, could reach that level of output due to a 50% increase in the size of its corn harvests and a 10% gain in soy production, according to Gustavo Grobocopatel, director general of the Los Grobo group.

"Argentina, which is producing 90 million tonnes of grains this year, is soon going to produce 120 million tonnes. If prices stay at current levels, in three years. If prices fall, or taxes or fertilizer costs go up, it's going to take five or six years," he said.

Record production
The Argentine government estimates the 2006/07 soybean harvest at between 42.5 million and 44.5 million tonnes, with entire production of grains and oilseeds coming in at a record 94 million tonnes. Grobocopatel's firm, the best known face of Argentina's soy boom, farms just over 100,000 hectares in the country, which is also a leading supplier of wheat, beef and corn. He also estimated that global soy prices would rise because the United States is expected to sow less of the oilseed.

"High corn prices mean the United States will plant more corn and less soy. The market's going to push up the soy price in three to five months, meaning Mercosur can increase soy production and supply the world," he said. Grobocopatel, who recently signed a deal to help Venezuela step up soy production, said the same trend toward corn would also be felt in Argentina.

Infrastructure
Argentina's soy production has roughly doubled in the last decade, and Grobocopatel said there was still room for expansion in marginal parts of the key farming provinces of Buenos Aires and Entre Rios. He said such growth should be accompanied by greater investment in road building.
That might also include improving waterways so more soybeans could be imported from neighboring Brazil and Paraguay to take advantage of Argentina's ample soy-processing capacity.

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