Argentine agrochemical imports plunge

Argentine agrochemical imports during the first seven months of the year plunged 80 per cent on the year as farmers cut investment.

This came amid a simmering conflict with the government over grain export taxes and intervention in agricultural markets.

Just 263,000 metric tons of agrochemicals valued at $439 million were imported between January and July, think tank IES Consultores said in a report yesterday.

The figures show a clear retraction of the farm sector, which is suffering "from the drought and erratic government policies, which affect planting decisions and demand for inputs," IES said.

Fertilizer imports during the period fell over 90 per cent.

The leading provider of Argentinas agrochemical imports was China, with 41 per cent, followed by Brazil with 16 per cent, the US with 15 per cent and Russia at 5 per cent.

Farmers have just finished planting the 2009-10 wheat crop, with just 2.8 million hectares seeded, the smallest area going to the crop in over 100 years, according to the Buenos Aires Cereals Exchange.

Commercial corn area is expected to be down sharply as well. Planted area is expected to total just 2 million hectares, a 19 per cent drop on the year.
Farmers are expected to continue the shift to soybeans.

Soy planting is likely to surge to between 19 million and 20 million hectares during the 2009-10 season, according to private analysts.

That would shatter the record set during the 2008-09 season, when farmers seeded 16.6 million hectares with the oilseed.

Farmers lifted a one week strike yesterday, which they called to protest a presidential veto of export tax breaks for some farmers hit hard by drought last season. Farmers protest bitterly over grain export taxes, which run as high as 35 per cent in the case of soybeans.

Government limits on corn and wheat exports designed to ensure domestic supply has led to a big shift away from those crops and to soybeans. There is virtually no domestic demand for soybeans, and exports are not controlled.