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Grain: World Markets and
Trade
September 1997
While Argentina's domestic consumption of wheat has remained
fairly stable over time, investments in fertilizer and equipment
have soared, new farming technologies have been adopted, and
planted area has steadily increased during the 1990's. When this
was combined with last year's near-perfect weather the result was
not only a record wheat crop -- a full one million tons above the
previous high -- but record corn, soybean and rice crops as well;
a Grand Slam not commonly seen in the same country during a
single crop cycle. However, limited storage capacity and fears of
transportation bottlenecks forced the bulk of the wheat crop
immediately into export channels, reducing global prices to
seasonal lows and depressing grower returns. Still, the ports
were able to handle nearly 2.5 million tons of wheat in December
alone (the previous monthly record was 1.5 million) and the
nation's total storage capacity is increasing at a rate of two
million tons each year.
Argentina aggressively marketed its 1996/97 wheat crop and
succeeded in entering several new markets around the world
including North Africa, Eastern Europe and even the European
Union (see inside front cover). As ongoing improvements produce
greater efficiencies and increased yields, Argentina is likely to
focus on crop quality and the reliability of its delivery. With
trade agreements and geographic advantages assuring that some of
the world's fastest growing importers already are somewhat
captive markets, Argentina may be able to mount more frequent
challenges to other competitors in hard wheat markets which
remain, for now, outside its normal export area.
For more information, contact James Gartner at (202) 690-4130.
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