Argentina is unlikely to sell large volumes of corn to China this year, despite a recent deal between the two countries on trading the grain, due to a lower-than-expected output, an Argentine trader said on Wednesday.
A long dry spell this year has raised questions about how much corn would be available for export from Argentina, the No. 2 global supplier after the United States. Supply concerns have pushed Chicago Board of Trade benchmark corn prices to their highest since January this week.
"This year we don't see any corn exports to China, maybe one cargo just to prove that the relationship is working," Freddy Pranteda, director of grains and oilseeds desk at Buenos Aires-based brokerage Cosur, told reporters on the sidelines of an industry conference in Singapore.
In February, Argentina's farm minister announced an agreement on "a protocol through which all the derivatives of our corn can enter the Chinese market, which was not the case previously".
Argentina was earlier expected to produce 28 to 30 million tonnes of corn this year, but because of the drought, output may come in at up to 22 million tonnes, Pranteda said.
This would leave the country with 13-14 million tonnes for exports to mainly its traditional customers, he added.
"In the future it is possible (to sell large volumes) as China has done a lot of work to certify Argentine corn."
Cosur is one of the largest Argentine brokerages, handling 13 million tonnes of grains, oilseeds and vegetable oils annually. (Reporting by Naveen Thukral; Writing by Himani Sarkar; Editing by Jacqueline Wong)