Argentina's hoped-for record corn harvest threatened by sliding prices -exchange

By Maximilian Heath

BUENOS AIRES, Feb 23 (Reuters) - A highly anticipated record corn harvest in Argentina could see its benefits curbed by a global decline in prices, the country's Rosario grains exchange said on Friday, in a possible blow to a new government battling the economy's worst crisis in decades.

Corn exports from Argentina, the world's third biggest supplier, are expected to rise 53% compared to last season thanks to ample rainfall favoring the harvest estimated at a record 57 million metric tons.

The South American country exports its corn mostly to buyers in Vietnam, Algeria and South Korea.

Local farmers have benefited from frequent rainfall linked to the weather phenomenon known as El Nino, providing a much-needed respite after the previous season was crippled by a historic drought that saw the country produce just 36 million tons of corn.

External sales value, however, should increase just 20% from last season to some $7.66 billion, the exchange warned.

"This is considerably lower than the volume increase," it said, stressing that the rise is dependent on current prices holding steady.

Falling corn prices could be a blow to the government of libertarian President Javier Milei, who took office in December and is facing an economy with net negative foreign reserves, annual inflation above 200% and a surging poverty rate.

The government currently levies a 12% export tax on corn.

According to the exchange, Argentina's main agricultural heartlands received between 20 and 50 millimeters of rain over the last 24 hours, helping sustain the country's corn and soybean crops through their key development stages.

A state weather agency predicted on Wednesday that parts of northeastern Argentina would also see fresh rains from Sunday through early next week.

Farmers are set to begin harvesting their corn and soy crops next month. (Reporting by Maximilian Heath; Writing by Sarah Morland; Editing by Aurora Ellis)