By Helen Popper
BUENOS AIRES (Reuters) - 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 on Monday.
Argentina, the world's No. 3 producer and exporter of soybeans, could reach that level of output due to a 50 percent increase in the size of its corn harvests and a 10 percent gain in soy production, Gustavo Grobocopatel, director general of the Los Grobo group, told the Reuters Latin American Investment Summit in Buenos Aires.
"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 on Friday.
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.
The Mercosur trade bloc includes other leading soy-producing countries such as Brazil, the No. 2 exporter after the United States, and Paraguay, the world's fourth-biggest soy supplier.
Industry analysts expect U.S. farmers to dedicate less land to soybeans to take advantage of the high prices for corn, riding high on increasing ethanol production.
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.
"Next year, the area could go up 50 percent. The problem is that there's not enough seed," he said, estimating that production could rise to 30 million tonnes, up from the government's 2006/07 estimate of between 21 million and 22 million tonnes.
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.
"The priorities are roads, at least 8,000 kilometers of roads," he said, appealing to the government -- which has repeatedly clashed with farmers -- to reinvest some of the sector's tax contributions toward improving infrastructure.
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.
(With additional reporting by Karina Grazina, Cesar Illiano and Jorge Otaola)
© Thomson Reuters 2009. All rights reserved.
| Japan Investment | Jul 07 - 8, 2009 | Country Summits |
| Global Real Estate | Jun 22 - 24, 2009 | Real Estate |
| Investment Outlook | Jun 15 - 18, 2009 | Financial Services / Exchanges |
| Global Retail | Jun 10 - 12, 2009 | Consumer & Retail |
| Global Luxury | Jun 08 - 10, 2009 | Hotels/Casinos |
