Argentina and China reach trade deal

China’s sanitary agency, or Aqsiq, has opened the Asian giant’s markets to Argentine corn, beef, wine, biofuels and barley, the agriculture ministry said in a statement Thursday.

The deal will create more demand for Argentina agricultural products and agriculture business that supports farms in the value chain.

China has historically been a major corn exporter, but a drought last season and soaring demand have turned China into an importer. China’s agriculture minister visited Argentina in November and pledged to work toward opening up the Chinese market to the Argentine farm goods.

The agriculture ministry has forecast corn production for the 2010-11 seasons at 21.6 million metric tons, one of the largest crops on record.

Argentina is the world’s second-largest corn exporter behind the U.S., exporting almost 18 million tons of corn in 2010. Argentina is also the top global beef exporter. Shipments to China have been closed since a 2006 outbreak of foot-and-
mouth disease in Argentina.

However, prospects for beef trade are limited due to higher Chinese demand for pork, chicken and other meats rather than steak.

Argentine beef sales will likely focus on innards and high-grade beef cuts for hotels and restaurants, according to Argentina’s Agriculture Ministry.