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Production
Estimates and Crop Assessment Division |
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Production
Estimates and Crop Assessment Division |
July 15, 2003
Argentine 2003/04 peanut production is forecast to increase 36 percent from last year’s low levels. Last year’s short crop and strong international demand have boosted planting prospects. The recent granting of a Generalized System of Preferences (GSP) for Argentine peanuts is unlikely to change production sentiments.
Peanut farmers in Argentina are forecast to increase area by 25 percent in 2003/04. They are responding to strong international demand and a boost in local prices due to the lower than expected production for the 2002/03 crop. Argentine peanut production is forecast at 300,000 metric tons, up 36 percent or 80,000 from last year. Yield is forecast at average levels of 1.54 tons per hectare. Peanut planting occurs in October and November in Argentina, and harvesting starts in April.
Argentina’s peanut area is concentrated in Cordoba Province, where 95 percent of the peanuts are grown. The other areas are Salta, Corrientes, and San Luis Provinces. Peanut area has been relatively stable, especially compared to the dramatic rise in soybean area in Cordoba Province. The relatively low cost of soybean production compared to peanuts and the introduction of genetically modified soybeans has made soybeans more attractive to grow.
Peanut production reached 220,000 tons in 2002/03, below-average production levels of 347,000 tons, and the smallest production since the 1993/94 season. A below-average yield was caused by less-than-normal precipitation in central Cordoba Province during January and February. Yield was 1.42 tons per hectare.
The 2002/03 crop season was the first affected by the increase of the export tax. The Argentine government increased agricultural export taxes April 9, 2002, in a bid to boost revenue for the central Government. The export tax was increased to 23.5 percent for unprocessed soybeans, sunflowerseed, and peanuts while the tax for processed oilseeds was increased to 20 percent. The differential of 3.5 percent was maintained and favors the Argentine processing of oilseeds into value added products. Despite the preference for domestic processing, more than half of Argentine peanuts are exported, principally to the Netherlands.
The Generalized System of Preferences (GSP), the program under which products from 140 beneficiary developing countries and territories can enter the United States duty-free, was expanded July 1, 2003, to include Argentine peanuts (shelled, in-shell, blanched or otherwise prepared). The GSP concession reduces the tariff to zero on peanuts within Argentina's 43,901 ton quota. Historically Argentina filled its 43,901-ton quota without GSP concessions by the first day. Since out-of-quota peanut imports would continue to be subjected to a tariff, it is not likely Argentina would increase its peanut exports to the United States because of the change in the GSP. During the past year, Argentine peanut producers increased exports to Europe where prices were higher than U.S. peanut prices. The U.S. peanut program was restructured in the 2002 Farm Bill, which led to a drop in U.S. domestic prices.
