MercoPress. South Atlantic News Agency

Argentina's grain crop forecasted to reach 120 million tons

Argentina could increase its annual grain production to 120 million tons by 2010 from about 90 million tons currently according to a top executive of one of the country's leading soy producers.

Argentina, the world's number three producer and exporter of soybeans, could reach that level of output due to a 50% increase in the size of its corn harvests and a 10% gain in soy production, Gustavo Grobocopatel, director general of the Los Grobo group, was quoted during the Reuters Latin American Investment Summit in Buenos Aires. "Argentina, which is producing 90 million tons of grains this year, is soon going to produce 120 million tons: if prices stay at current levels, in three years; if prices fall, or taxes or fertilizer costs go up, it's going to take five or six years" he said. The Argentine government estimates the 2006-07 soybean harvest at between 42.5 and 44.5 million tons, with entire production of grains and oilseeds coming in at a record 94 million tons. Grobocopatel's firm, one of the best known faces of Argentina's soy boom, farms just over 100,000 hectares in the country, which is also a leading supplier of wheat, beef and corn. He also estimated that global soy prices would rise because the United States is expected to sow less of the oilseed. "High corn prices mean the United States will plant more corn and less soy. The market's going to push up the soy price in three to five months, meaning Mercosur can increase soy production and supply the world," he said. Mercosur includes other leading soy-producing countries such as Brazil, the number two exporter behind the US and Paraguay the world's fourth-biggest soy supplier. Industry analysts expect US farmers to dedicate less land to soybeans to take advantage of the high prices for corn, riding high on increasing ethanol production. Grobocopatel, who recently signed a deal to help Venezuela step up soy production, said the same trend toward corn would also be felt in Argentina. "Next year, the area could go up 50%. The problem is that there's not enough seed," he said, estimating that production could rise to 30 million tons, up from the government's 2006/07 estimate of between 21 million and 22 million tons. Argentina's soy production has roughly doubled in the last decade, and Grobocopatel said there was still room for expansion in marginal parts of the key farming provinces of Buenos Aires and Entre Rios. He said such growth should be accompanied by greater investment in road building. "The priorities are roads, at least 8.000 kilometres of roads" he insisted appealing to the government â€" which has repeatedly clashed with farmers â€" to reinvest some of the sector's tax contributions toward improving infrastructure. That might also include improving waterways so more soybeans could be imported from neighbouring Brazil and Paraguay to take advantage of Argentina's ample soy-processing and storage capacity.