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2-Plants: Argentina expects record corn harvest and more GM varieties

------------------------------- GENET-news -------------------------------

TITLE:  Argentina expects record corn harvest and more GM varieties
SOURCE: Bloomberg, USA
        posted by Checkbiotech, Switzerland
DATE:   15 Sep 2005

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Argentina expects record corn harvest and more GM varieties

BUENOS AIRES - Argentina will have a record crop of corn next year as
farmers expand planting to take advantage of an increase in prices they
expect in the aftermath of Hurricane Katrina in the U.S., Agriculture
Secretary Miguel Campos said.

Argentina will export more than 10 million tons of corn next year to meet
demand in international markets that U.S. farmers will fail to meet
because of the damage Katrina did to southern U.S. ports, through which
70 percent of the country's corn and soybean crops passes.

"Katrina will be favorable for prices, there's no doubt about that,"
Campos said in an interview in his office in Buenos Aires. "It's
impossible to think that after what happened, the flow of commerce won't
be restricted. That will benefit Argentina and Brazil."

Campos said the government will try to improve profit margins on corn by
permitting new varieties of genetically modified corn, which will make it
cheaper for farmers to produce the crop and help them alternate with
soybeans to avert depleting soil nutrients.

Argentina last month allowed the planting of corn from Syngenta AG and in
July allowed production of a variety produced by Monsanto Co.

"It's not so much a question of supply," Campos said. "It's a question of
flows. I can't see how the commodities are going to be exported with the
current port" situation in the U.S.

Surging exports of corn and soybeans have helped Argentina post trade
surpluses that have allowed the central bank to more than triple foreign
reserves to $25.7 billion from a low of $8.24 billion in January 2003.

Soybeans, its byproducts soy oil and soy meal, and corn have accounted
for about 26 percent of Argentina's exports this year, according to the
National Statistics Institute. The country is the second-biggest exporter
of corn and third-biggest of soy worldwide.

Price Drop

Corn prices have fallen in the U.S. since Katrina hit the Gulf Coast on
Aug. 29. The price has fallen 5.5 percent since that day on expectations
U.S. will harvest 10.639 billion bushels of corn this year, up 2.8
percent from an August forecast and the second-biggest crop ever,
according to the U.S. Department of Agriculture.

Corn futures for December delivery fell 1.2 percent today to $2.075 a
bushel on the Chicago Board of Trade from $2.10 a bushel yesterday.

Global corn production in the season beginning in October likely will be
663.5 million metric tons, the USDA said Sept. 12, up 0.9 percent from
its August forecast. That compares with an estimated 708.6 million tons
in the current season.

Analysts such as Ricardo Baccarin with Argentine grain broker Panagricola
said Campos's outlook is too optimistic because Argentina's 22.5 percent
tax rate on corn exports is a drag on investment in the industry and
because of the increase in global output.

"At current margins, exporting corn is no great business," Baccarin said.


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