US wheat export promoters attacked Argentina's government for
"short-sighted policies and misinformation", which they blamed for another weak
harvest in the South American country, which could provoke export curbs.
US Wheat Associates said that Argentine officials were "missing
the mark" with their policy of intervention in wheat markets, notably through
tight control of exports, with the aim of ensuring domestic supplies of an
important food grain.
"Government policies that control and restrict agricultural
exports from Argentina aim to secure the domestic food supply but end up
hurting Argentina's farmers by reducing their profit potential," US Wheat
Associates market analyst Casey Chumrau said, flagging the resultant "disincentives"
to sow wheat.
"With weather-related issues added to government
intervention, Argentina has produced its smallest crops since 1995-96 the last
"The prospect of an even smaller wheat crop has sparked
speculation of further market intervention, which would compound the damage to
Argentina's wheat farmers and their customers."
'No one wins'
The comments follow Argentina's release two weeks ago of a
long-awaited wheat harvest estimate which came in at 8.5m tonnes, well below
figures as high as 11m tonnes from other analysts.
"This is a dramatic decrease for a country that has produced
an annual average of 14.6m tonnes over the last decade," Mr Chumrau said, adding that the "credibility" of the official estimate was also in question, given its departure from other forecasts.
The weak crop threatens another season of poor exports as
historical customers such as Brazil, "have started to look elsewhere".
"When a government keeps changing the trade rules mid-game,
no one wins.
"Transparency is necessary for any country that strives to
be a reliable wheat supplier - an open market can easily adjust for annual
fluctuations in production caused by weather, demand shifts or other naturally
Out of favour
Argentine wheat area in 2012-13 fell to a 50-year low of
3.6m hectares, on US Department of Agriculture estimates, with only a small
increase pencilled in for this season, as farmers switch to alternatives such
as barley on which there are fewer export restrictions.
Wheat exports fell to 3.55m tonnes, the lowest since the 1970s.
For calendar 2013, Argentina's wheat shipments to Brazil,
its top customer, have more than halved, with those to second-ranked Peru tumbling
83%, US Wheat Associates said.
The organisation, while seeing demand for US wheat boosted
by weak Argentine supplies, is a strong proponent of free trade in grains.