March 25, 2020 / 11:45 PM / 11 days ago

UPDATE 1-Argentine farmers seen holding back on crop delivery as coronavirus sows uncertainty

(Adds government resolution allowing grains trucks to circulate freely despite anti-pandemic health measures)

By Hugh Bronstein and Maximilian Heath

BUENOS AIRES, March 25 (Reuters) - Argentine soy and corn farmers were harvesting on Wednesday but looked increasingly unlikely to rush their crops to market, even after the government moved to resolve coronavirus-related problems that have slowed delivery to the country’s export hubs.

Growers said they may hold some crops back from buyers as uncertainty over the fast-spreading virus mounted along with expectations of higher commodities prices ahead.

Disruptions from the world’s No. 3 corn and soybean exporter and No. 1 supplier of soymeal livestock feed could shift global commodity trade flows as importers turn to rival suppliers like Brazil or the United States.

More than 70 municipalities in Argentina had enforced anti-coronavirus measures by controlling the movement of grains trucks through their jurisdictions. That slowed the supply of beans to the giant-sized soymeal factories that dot the banks of Argentina’s Parana River, the country’s key grains superhighway.

But late on Wednesday, Argentina’s Transportation Ministry issued a resolution saying people working in jobs related to foreign trade, specifically grains transporters, were “exempt from compliance with rules mandating preventive isolation.”

Argentina’s CIARA-CEC export companies’ chamber welcomed the resolution, saying in statement that it hoped the new policy would help clear logistics bottlenecks “over the days ahead.”

Local industry sources said it was only a matter of time before port workers or truckers tested positive for the virus, which would increase uncertainty. A number of growers have said they may opt to stockpile part of their harvests, waiting for higher prices and an expected weakening of the local currency.

“We are harvesting, no problem,” said Eduardo Bell, a soy farmer in the Pampas grains belt town of Saladillo, Buenos Aires province, which had experienced a slowdown in trucking services.

“There’s always the possibility of bagging the harvest. Prices are bad right now so it might not be a bad idea to hang on to the crop until September,” he said by telephone.

The reference price for Argentine soybeans was $226 per tonne on Wednesday versus $245 per tonne a year ago.

“Farmers will sell the minimum amount of soy and corn needed to cover their costs, and hang onto the rest. Prices are low and Argentina, like the rest of the world, is headed for hard economic times. This all increases uncertainty,” said Buenos Aires-based farm consultant Pablo Adreani.

“The peso will probably weaken and commodity prices will likely rise as the weeks go by. When you put this all together, it makes sense for farmers to hang on to their crops for now.”

The pandemic has struck at the worst possible time for Argentine growers as they start harvesting soy and corn, the country’s main cash crops. Grains importers are relying on supplies from Argentina and Brazil ahead of the U.S. harvest, which come in the North American fall season.

Argentine growers are expected to harvest 50 million tonnes of corn this season and 51.5 million tonnes of soy. (Reporting by Hugh Bronstein and Maximilian Heath, Additional reporting by Karl Plume in Chicago; Editing by Bernadette Baum and Tom Brown)

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