Argentine grain output seen higher

Argentina, the world’s No. 3 producer and exporter of soybeans, could reach
that level of output due to a 50% increase in the size of its corn harvests and
a 10% gain in soy production, according to Gustavo Grobocopatel, director
general of the Los Grobo group.

“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.

Record production
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. 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.

Infrastructure
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.
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.

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