Brazilian government sends Argentine corn to drought-hit state

SAO PAULO Thu May 23, 2013 5:25pm EDT

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SAO PAULO May 23 (Reuters) - Twenty thousand tonnes of Argentine corn arrived in Northeastern Brazil on Thursday, the state of Bahia said, a sign Brazil is purchasing corn from its southern neighbor even though it is expected to harvest its second consecutive record crop.

The corn, which arrived in Salvador's Port of Cotegipe, is a donation from the federal government, Bahia state's agriculture secretariat said in an e-mailed statement. The corn will be sold at a subsidized price to small-scale ranchers with cows suffering from the worst drought in 50 years.

Brazil's crop-supply agency Conab expects the country to harvest a record 78 million tonnes of corn this season, surpassing last season's record 73.3 million tonnes.

Brazil has had trouble managing its food stocks due to insufficient storage silos and roads. Public corn stocks recently fell to a low 500,000 tonnes.

Port expansion, road repairs and other infrastructure construction has not kept up with the country's surging grains output. Large distances and limited highway connections make it difficult to move corn from Brazil's center-south grain belt to the Northeast, where the semi-arid backlands face frequent droughts.

Even as Brazil makes rare corn imports, its exports are expected to reach 21.5 million tonnes this season, surpassing Argentina's corn exports for the second straight year, according to the U.S. Department of Agriculture. (Reporting by Caroline Stauffer; Editing by Jeb Blount and Andrew Hay)

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