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Argentine farm exports rocket 68 pct higher in first quarter

Argentine farm exports rocket 68 pct higher in first quarter
A combine harvester is used to harvest wheat in a field in the village of General Belgrano, 160 km (100 miles) west of Buenos Aires, December 18, 2012. : REUTERS/Enrique Marcarian Argentine farm exports rocketed 68 percent higher in the first quarter versus the same 2015 period thanks to new policies that prompted growers to sell stockpiles built up under the previous administration, the government said on Tuesday.

The surge in shipments from the South American grains powerhouse will likely weigh on global food prices, which are near a seven-year low and expected to fall farther due to slowing growth in the global economy.

In the first three months of the year, Argentina exported 19.97 million tonnes of farm products versus 11.91 million in the first quarter of 2015, the government said in a statement.

Free-markets proponent Mauricio Macri took office as president in December, promptly ditching the trade and currency controls applied by his leftist predecessor Cristina Fernandez.

His policies have been embraced by the markets and prompted a congratulatory visit from U.S. President Barack Obama. But he could face political problems, with the country's powerful trade unions opposing his spending cuts.

Leading the first-quarter export surge were wheat and corn, which growers piled up on their farms during Fernandez's rule. She limited export of both crops and taxed the international shipments that were allowed to go through.

Macri scrapped those policies. Wheat exports shot 105 percent higher while corn rose 84 percent.

Chicago Board of trade corn prices are up about 5 percent so far for 2016 but have struggled to rise above $4 a bushel, due in part to Argentina's stepped-up export pace.

CBOT wheat prices are down about 2 percent so far in 2016.

"Wheat re-entered historic markets such as Egypt, Morocco, Indonesia and Vietnam. Argentina exported more than three million tonnes of wheat to these markets during the quarter, twice the amount in the same 2015 period," the statement said.

Argentina is also the world's top supplier of soymeal livestock feed, exports of which grew 73 percent during the quarter. Soy production is likely to be crimped this year by flooding at the start of the harvest in April.

Ernesto Ambrosetti, economist at the Argentina Rural Society, which represents big farms, said the country had nonetheless reclaimed its place as a reliable food supplier. He said farm exports have come to $9.9 billion since Macri took office, 60 percent higher year on year.

Argentina's CIARA-CEC export company chamber warned not to expect such a big first-quarter increase next year.

"Export growth in the first quarter was due to measures taken by the new administration that allowed trading of accumulated stocks of grains and cereals, which made this an atypical quarter," said CIARA-CEC spokesman Andres Alcaraz.

"The first quarter of the year is usually one of low activity," Alcaraz said.

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