Argentine wheat quality expected to jump as demand soars

BUENOS AIRES: The quality of Argentina's wheat crop will jump to help meet growing world demand as farmers in the Pampas grains belt invest more in fertilizers and high-protein seed varieties, the head of the country's wheat industry chamber said in an interview.

Global stockpiles of the grain are projected to be the largest ever this season. But supplies of high-protein wheat used to make hearty breads and pizza have tightened due in part to a sub-par protein crop in the United States. A high-protein Argentine crop would help fill the gap and ease food prices.

This planting season is the first under President Mauricio Macri, who eliminated export taxes and trade controls used by the previous administration to keep wheat in the country and ensure ample domestic food supplies.

"Growers are investing and focusing on producing a good-quality wheat crop now that the government has taken away export taxes and export quotas," said David Hughes, president of Argentine wheat industry chamber Argentrigo.

The controls imposed by the previous administration hurt farm profits and reduced incentive the plant, he said.

"Last year, wheat was in survival mode," said Hughes in the interview conducted on Sunday.

"This year's crop should have an average 12 percent protein content versus 10.4 percent in the 2015/16 season. Argentine wheat planting is in June and July with the harvest ending in January.

So far the weather has cooperated. Pockets of dryness in wheat farm areas in Entre Rios province and southeast Buenos Aires got relief from rains over the weekend.

With crops entering their flowering stage in the country's main wheat belt, centered in southern Buenos Aires province, wheat yields can be calculated over the next month.

"Today for the most part there are no extraordinary or alarming weather patterns," Hughes said. "In general we have good moisture levels."

Argentina should produce 12.5 million tonnes of the grain this season versus 10.3 million in 2015/16, according to the Buenos Aires Grains Exchange.

The Rosario exchange expects a 13-million-tonne crop versus 10.9 million tonnes in 2015/16.

Hughes expects Argentina to use 5 million to 6 million tonnes domestically and export about 5 million tonnes to Brazil.

The rest, he said, will be marketed to new customers in Latin America, Southeast Asia and Sub-Saharan Africa.

"We have to get back into the international circuit and remind everybody that we have high-protein wheat available," Hughes said.