UPDATE 3-Argentina frees 5 mln T of 2013/14 wheat for export-sources

Wed Mar 6, 2013 9:23pm EST

* Argentina consumes 6 mln T of wheat domestically each year

* Wheat output seen at 10.1 million tonnes this crop year

* Argentina a top grains exporter at a time of rising demand (Adds farmer quote, background, byline)

By Hugh Bronstein and Karina Grazina

BUENOS AIRES, March 6 (Reuters) - Grains powerhouse Argentina has authorized exports of 5 million tonnes of wheat for the crop that farmers will begin planting in the coming months, sources said on Wednesday, a move that could help ease concerns about tight global supplies.

An industry source, who asked not to be named, and a government source, who also asked for anonymity, told Reuters that officials told farmers of the 2013/14 wheat export quota at special meeting held on Wednesday night.

Argentina is a major world supplier of soy, corn and wheat at a time when consumer nations are clamoring for South American grains to compensate for disappointing harvests in breadbaskets Russia, the United States and Australia.

The United Nations food agency warned last month that adverse crop weather could cause violent price spikes this year due to tight world grains stocks.

Benchmark Chicago wheat futures, however, were trading this week at their lowest in almost nine months as heavy snows in top exporter the United States eased dryness in key growing areas and boosted production estimates.

Argentina restricts exports of wheat to ensure ample domestic food supplies. The government also approved an additional 1 million tonnes of 2012/13 wheat for export at the meeting, bringing the current season's total exportable surplus to 3 million tonnes, the sources said.

The agriculture ministry estimates the recently completed 2012/13 wheat harvest at 10.1 million tonnes. The crop was reduced by early season flooding and will be far under the 14.1 million collected in the 2011/12 season.

Internal wheat demand in Argentina is about 6 million tonnes.

Growers say the curbs placed on international wheat sales keep them guessing about how much wheat to plant and some have shifted to alternative crops that can be exported freely like soy and beer barley.

Wednesday's announcement came earlier than in previous years, which may help farmers plan for the upcoming season.

Wheat planting in Argentina starts in late May and ends in August, with most seeds going into the ground in June and July.

Argentine soy farming has exploded in recent years as growers seek to avoid export curbs that the government slaps on corn and wheat. Barley output has shot to just under 5 million tonnes from less than 800,000 tonnes in the 2005/06 crop year, before the curbs went into effect.

President Cristina Fernandez has increased the government's role in Latin America's third-biggest economy, often putting her at odds with farmers who say her policies are chasing off investment and keeping the country from meeting its full agricultural potential at a time of rising world food demand.

"We don't need an export quota, whether it be announced early or late in the season," said Santiago del Solar, who manages farmland in the main agricultural province of Buenos Aires. "In order for the wheat sector to prosper, we need to go back to a free market." (Editing by Gary Hill, Steve Orlofsky, Lisa Shumaker and Ed Davies)

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