The impact of Argentina crisis on the international corn market

Introduction: in recent days, Argentina's economic and political crisis has worsened, and the president of Argentina has been forced to resign The instability in South America has brought huge pressure on the world agricultural products, especially corn market 20 On March 21, Chicago corn futures closed lower In March, the contract price closed at 211.50 cents / bushel (83.56 US dollars / ton), down 4.75 cents / bushel in two days Chicago corn futures prices hit a new low since December Many futures traders began to wait and see, and the industry paid close attention to the development of the situation in Afghanistan Then what was the impact of the Argentine crisis on the international corn market? In recent years, Argentina's exports of livestock products and agricultural products account for about 80% of Argentina's total exports, mainly agricultural and livestock products such as corn, meat and wheat According to the latest forecast of the United States Department of agriculture, Argentina's corn production in 2001 / 02 was 12.5 million tons, of which 7.5 million tons will be exported Argentine corn plays an important role in the world corn market and is the main competitor of American and Chinese corn The export of Arabian corn accounted for 14% of the world's total export in 1999 / 00 crop year, 12% in 2000 / 01 crop year, and it is expected to reduce to about 9% in 2001 / 02 In the short term, experts believe that any solution will not have a positive impact on international grain trade in the short term If the Argentine government does not have a thorough debt policy, the Argentine currency will face devaluation If Argentina's currency devalues, Argentina's corn may conduct export dumping, which will change the world's corn trade pattern and may trigger a series of chain reactions If Argentina carries out dumping, it will have a great impact on China's corn export, and China may lose some corn markets such as Malaysia and South Korea At present, the FOB price of Argentine corn export is 93.1-93.6 US dollars / ton If the peso depreciates by 30 percentage points, the FOB price will be 65.2-65.5 US dollars / ton based on simple calculation Of course, the export price will not be so low The Argentine crisis is unlikely to change the short-term balance of supply and demand in the international spot market At present, there is an oversupply in the international market, and China is also increasing its export efforts to reduce inventory How much corn Argentina can provide for export depends on how much corn Argentine farmers can sell In the long run, Argentina's future economic situation and trade policy may become uncertain Whether the economic and political crisis in Argentina will expand or not is a variable First, Argentina's economy has been deteriorating for a long time The financial crisis and fiscal deficit will affect the recovery of global stock market, and will put pressure on the world corn market, which continues to be depressed Second, the deterioration of the Argentine economy will affect the demand for grain consumption in Argentina and the world, and increase the inventory pressure.