Minor Oilseed Output Under Pressure in Argentina

BUENOS AIRES - May 9/02 - STAT -- Minor oilseed production is coming under pressure in Argentina, with out put of oilseed peanuts and cottonseed posting substantial year over declines on account of falling interest among growers in producing these crops.

In the latest report on the oilseed situation in the country, the U.S. agricultural attache here estimates this year's cottonseed harvest will plunge from 340,000 metric tons (MT) to just 125,000 MT on account of a steep reduction in cotton area from 408,000 to 172,000 hectares.

Output of oilseed peanuts is expected to slide from 250,000 MT last year to just 218,000 MT, in line with the decline in seeding area from 252,000 hectares to an estimated 220,000.

Little improvement is expected in the situation in the coming year. Peanut output is expected to remain under pressure, with area falling to 172,000 hectares for a prospective 250,000 MT harvest; while cotton area manages a small advance to 190,000 hectares for a prospective 135,000 MT cottonseed harvest.

Commenting on the situation, the U.S. agricultural attache said peanut production area is concentrated in Cordoba Province, which accounts for approximately 95% of the total area of 220,000 hectares. The remainder is planted in Salta (10,000 hectares), Corrientes (500 hectares) and San Luis (600 hectares).

The extremely tight credit situation and possible increases in production in competing countries such as the U.S. are expected to result in a fall in area planted to peanuts to 172,000 hectares in next year's crop (which will be harvested a year from now). Producing peanuts in Cordoba is more than twice as expensive as competing crops, a significant disadvantage in the current tight credit situation.

In the case of cotton, farmers switched land into soybeans in key producing areas due to low world prices for cottonseed and fiber and the lower cost of producing soybeans.

"The devaluation in January has made cotton production more profitable (cotton is subject to a lower export tax than soybeans) and trade contacts expect some recovery in area for next year," the agricultural attache said. "We do not, however, expect production to increase significantly due to the lack of credit for producing input intensive crops like cotton and the reportedly good results this year for farmers who switched to soybeans."