Mission examines Argentine market on cusp of major policy changes
A recent U.S. Grains Council (USGC) mission to Argentina had impeccable timing, offering participants the chance to meet with local grain industry representatives just as new President Mauricio Macri has begun implementing changes that could have a significant impact on both domestic and international grain markets.
Four U.S. ethanol industry representatives traveled with the Council to Argentina two weeks ago to observe local conditions, trade opportunities and constraints.
“During the last five years, U.S. corn and distiller’s dried grains with solubles (DDGS) exports to the Latin American region have been growing,” said USGC Regional Director for the Western Hemisphere Marri Carrow. “However, we’ve also seen Argentine DDGS exports increase as the local corn-based ethanol industry grows, so we must monitor the situation closely.”
The region houses some of the most important U.S. grain export markets, many of which benefit from trade agreements or logistical advantages. As of Jan. 7, the entire Western Hemisphere region purchased 13.0 million metric tons (512 million bushels) of U.S. corn this marketing year. While this is down slightly from the 14.2 million tons (559 million bushels) of U.S. corn they purchased during the same period last year, the region accounts for more than 60 percent of all U.S. corn sales.
“While the region has strong demand, South American corn production and subsequent exports have continued to increase,” Carrow said. “In order to continue to be competitive in the global market, we must monitor our competition.
“This mission was essential to USGC programming efforts, both regionally and globally, in furthering our understanding of Argentina’s corn ethanol and DDGS production capacity and export goals. That said, while Argentina is our competitor in the global market, the country’s producers are also our allies in global trade issues related to the grain and ethanol marketplaces.”
The Argentine assessment will help the Council add depth to its programs ongoing in the region and around the world. The team participants will report their findings during the Council’s upcoming winter meeting to stakeholders, who will use the information to assist in planning 2017 marketing strategies.