Argentina is normally the world’s second biggest corn exporter, with sales of about $4.4 billion. That represents nearly 15 per cent of the world’s corn export market, a significant amount that the global food system expects to see through the normal course of trade.
But this year, that’s not the case. Argentina has decided to limit the amount of corn it will export. And we should all be concerned about the reason why.
Argentina is facing a difficult domestic situation. It’s struggling with inflation, which makes it expensive to import almost anything. For years its economy has fared poorly, and its coffers are straining.
At the same time, it’s being hit with the second wave of the COVID-19 pandemic and wants to provide support for low-income families. That’s where whatever money it has is headed, instead of helping offset high import costs.
As the old year was coming to an end last week, the country announced it was suspending corn exports, until March 1. It said it needed the corn to ensure ample domestic food supplies in its summer months, when cereals can be scarce.
Note, this is a just-in-case scenario, a clear example of a country looking after its self-interests first. Much of the cereals crop is fed to the livestock that Argentineans, renowned for their love of meat, devour. Depleting livestock herds because feed is unavailable would be unpopular.
Argentina’s holdback is likely to keep about four million tonnes of corn inside the country. And corn may be just the tip of the proverbial iceberg.
The country is also a major soybean exporter – in fact, its soybean sales are double that of its corn sales. It’s also a world leader in wheat exports.
So, will those commodities be next to be held back?
Argentinean farmers are unhappy. Buyers on the global market can be fickle, and if they sense Argentinean grain and oilseed supplies are unreliable, they’ll establish business connections elsewhere…provided, of course, other countries don’t start holding back part of their harvests too.
Could that happen? I think so. Exporters work very hard to build up markets, only to see them hammered by politics, such as China’s retaliatory, bullying tactics against buying Canadian canola and soybeans. It’s certainly conceivable that similar political impetus could prompt holdbacks, even though on some level it sounds like paranoia.
Still, our newest and biggest soybean export market in the fall was Iran, the same country that “mistakenly” killed 57 Canadians at this time last year on a Ukraine Airlines plane it shot down. That doesn’t sound like a buyer we can really count on, nor should we.
I believe 2021 will be a year that we should all watch very closely with regards to the food supply. We’ve already heard difficult predictions from Canada’s Food Price Report, released in December, which estimated food will cost families five per cent more – nearly $700 – than last year. Vegetables, along with meat, are the leading commodities that are expected to climb the most, an estimated 4.6 to 6.5 per cent.
The report’s co-author and co-spokesperson, Prof. Sylvain Charlebois at Dalhousie University, starkly warns that many families will be “left behind.” In fact, many already are, with hard times forced on us by the COVID-19 pandemic putting a huge strain on food banks.
National food policy advocates have long warned that we need to be more self-sufficient in food. Maybe measures like export holdbacks and escalating prices will drive that point home. Increased self-sufficiency will only happen if it’s planned. And right now, it’s not.