January 18, 2013 / 3:51 PM / 8 years ago

EXCLUSIVE-UPDATE 2-Argentina to OK more corn exports

* Government curbs corn exports to ensure domestic supply
    * Farmers need rain before month's end to bolster yields
    * World looks to Argentina to compensate for thin U.S. crop

 (Adds context, quotes)
    By Hugh Bronstein
    BUENOS AIRES, Jan 18 (Reuters) - Argentina will approve at
least 3 million tonnes more in 2012/13 corn exports over the
weeks ahead, Agriculture Secretary Lorenzo Basso said on Friday,
good news for consumer nations hit by high prices caused by thin
global supplies.
    The government in Argentina - the world's No. 3 corn
exporter - controls wheat and corn exports through a quota
system designed to guarantee ample and affordable local food
supplies, a policy that is unpopular with growers.
    Forecasting a harvest of at least 26 million tonnes, Basso
said the additional export quota will be granted late this month
or in February, once the government has a more accurate forecast
for overall production.
    The government has already freed 15 million tonnes of
2012/13 corn for export and 8 million tonnes is needed for
domestic consumption.
    "We will have to open at least 3 million tonnes more," Basso
told Reuters in a telephone interview from Berlin, where he was
attending an agricultural conference. "I estimate that we will
announce the increased quota this month or next."
    Poorer countries concerned about the price of basic staples
are counting on Argentina to help compensate for last year's
poor corn crop in No. 1 supplier, the United States. Corn is
used in food production and livestock feed. So high corn prices
could drive up prices for a variety of foods, including meat.
    Benchmark Chicago corn futures are up 22.6 percent
over the last 12 months, having risen 4 percent in January
    The United States Department of Agriculture forecasts an
Argentine crop of 28 million tonnes. To reach that target, the
South American country needs rain before the end of this month.
    Corn plants in the Pampas farm belt must have moisture at
this point in the season to help them flower. This stage is key
to developing healthy yields. Meteorologists however see nothing
but blue skies and some light, scattered showers on the horizon.
    "There will not be the important amounts of rainfall through
the month of January that farmers want to receive," said Anthony
Deane of consultancy Weather Wise Argentine.
     The season started with the opposite problem, when
unusually harsh August through mid-December rains flooded wide
swathes of the corn belt. Seeding machines got stuck in the
Pampas mud and some of the low-lying fields that did get planted
were promptly attacked by toxic water-born fungi. 
    "Some areas were lost to flooding," Basso said. "But we are
sure to harvest at least 26 million tonnes of corn this year."
     Global food prices are meanwhile expected to remain high in
2013 as low stocks pose the risk of sharp increases if crops
fail, the United Nations warned this month.     

 (Reporting By Hugh Bronstein; Editing by Gerald E. McCormick,
Steve Orlofsky and Sofina Mirza-Reid)
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