BUENOS AIRES, Jan 5 (Reuters) - Importers of Argentine corn may reduce their purchases from the South American grains powerhouse due to the government's recent decision to suspend international shipments, the country's CEC chamber of export companies said on Tuesday.
As a measure to control domestic food prices paid by families contending with a long recession and the COVID-19 pandemic, the agriculture ministry last week announced a two month halt in corn exports from the world's No. 3 supplier.
The export suspension "introduces a variable of uncertainty among buyers that can reduce purchases and hurt Argentine corn prices," the CEC said in a statement. Farm groups have also spoken out against the suspension, saying it will put downward pressure on production as farmers hold back investments.
The cattle and poultry industry in Argentina uses corn to fatten chickens and cows. The government hopes that by keeping more corn in the country, the cost of feeding livestock will go down, increasing domestic food supplies.
But a joint statement from Argentina's soy, corn, wheat and sunflower seed associations said this type of intervention in the export markets "strongly erode confidence and leads to an immediate withdrawal of investments."
"We need to show our overseas customers that they can count on us as a reliable supplier," the statement said.
In announcing the new policy, the government said it was "based on the need to ensure the supply of grain for sectors that use it as a raw material for the production of animal protein such as pork, chicken, eggs, milk and cattle."
Buyers can still book corn from Argentina, but only for shipping after March 1. International sales of farm products are Argentina's top source of export dollars needed to stabilize the anemic peso currency and help fund coronavirus relief efforts.
(Reporting by Maximilian Heath and Hugh Bronstein; editing by Chizu Nomiyama)
