Possible default of Argentina may lead to reduction in corn output
According to the Reuters agency, during 2014/15 season, the sowing area of corn in Argentina may be substantially reduced if the government fails to avoid a new sovereign default in the negotiations, which will take place this month in New York.
The Argentine economy is in the state of deep recession; meanwhile, local farmers heavily rely on loans to fund planting. Argentina is the 3rd largest exporter of corn and soybeans. In case of a default interest rates will rise sharply. In Argentina corn is the most expensive crop to cultivate.
Currently, it’s a harvesting period for corn of 2013/14 season, and, according to experts of exchange market in Buenos Aires, corn yield may be about 25 million tons of corn.