Argentina seeks its first wheat shipments to China in decades

Argentina wheat traders are seeking to close their first significant sales to China since the 1990s, according to the head of the country’s top crop-exporting group.

China is making overtures for wheat purchases after it authorised Argentine shipments earlier this year, said Gustavo Idigoras, president of CIARA-CEC, whose members include the major agricultural trading houses. China also recently authorised purchases of Argentine corn, though no cargoes have yet sailed.

The move comes as Argentina, one of the world’s top wheat suppliers, is on track for a bumper harvest. At the same time, tariff threats from US president-elect Donald Trump are raising hopes among South American traders for greater export opportunities.

Growers in and around the southern half of Buenos Aires Province, who will harvest their golden wheat fields in the coming weeks, are forecast to produce 3.9 million metric tons, 18 percent more than a year ago when plants endured a drought. That’s according to a tour of farmland this week organised by the Bahía Blanca Grain Exchange.

The province, home to Argentina’s prime wheat region, will contribute to a broader production rebound after a La Niña climate system that threatened to parch fields again largely dissipated — helping President Javier Milei’s plan to kick-start an ailing economy.

Sporadic rains over the last few months fell just in time to keep plants in good condition, spurring improved yields, said Gabriel Abregos, an estimates analyst at the Bahia Blanca bourse. The US Department of Agriculture expects a national Argentine wheat crop of 17.5 million tons, up from 15.9 million last season.

China’s potential as a market for Argentine wheat may increase if Trump’s vow to slap tariffs on imports sparks a full-on trade war with retaliatory levies imposed by Beijing.

“Brazil took advantage of Trump’s first trade war, boosting its endeavour to be an agricultural force,” Idigoras said in an interview. “We need to know what a second trade war would look like — long, short, multi-destination, multi-product? — to see who could seize the opportunity this time around.”

However, Milei still needs to fulfill a promise to cut Argentina’s long-standing tariffs on its own crop exports.

Idigoras said exporters are lobbying the government to reduce the levies — which range from 12 percent to 33 percent , denting the country’s global competitiveness — for next season. But since Milei needs the revenue to reach ambitious budget goals, it isn’t clear if the efforts will succeed.

by Jonathan Gilbert, Bloomberg

Source: Buenos Aires Times

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