Corn and wheat shortages began several months ago and weren't relieved despite what critics called the government's stopgap measures. The timing of the grain shortage and its direct impact on bakeries couldn't be worse, critics said as media furor over bread prices and and shortages captured headlines days before Argentina's mid-term elections.
Gaps in supplies of corn were also reported across the country, Argentine media reported.
Traders said wholesale prices for both corn and wheat were double those on Chicago markets as profiteering set in. Bakeries said they couldn't avoid price hikes, forced as they were to pay ever higher rates for flour.
Weather vagaries would likely impact on the new wheat harvest as well and could push the prices even higher, analysts said. Some traders quoted wheat prices of $500 a ton, compared to about half that in Chicago.
The Argentine harvest for the 2012-13 season was affected by drought and in some areas an early freeze.
Argentina's annual wheat consumption stands near 6.5 million tons. Local wheat production normally would be enough to meet the entire demand. But poor weather and low yields have combined with speculation in the grain markets to complicate matters for the consumer.
There has been no explanation offered by either agriculture ministry officials or traders about the discrepancy between the estimated demand and reported output and supplies. Argentina was reported to have produced more than 8 million tons of wheat in the last season. Likely yields in the coming season could top 10 million tons, government data indicated.
Neither officials nor traders can explain the huge gap between the reported yields, and supplies and national demand.
Industry sources and cereals exchange officials also disagreed about the true picture in the corn market. In the last season, Agriculture Ministry officials claimed yields in excess of 32 million tons, but the Commerce Ministry's data showed the output was just over 30 million tons. Industry data indicated it couldn't be more than 26 million to 28 million tons.
In a further complication poultry farmers complain they're having trouble sourcing corn amid warnings that poultry farming may become another casualty, aside from the bakeries, of the current shortages of both corn and wheat. Corn and soy producers' groups have challenged reports of shortages, maintaining sufficient supplies exist but may not be distributed.
Analysts said opportunistic hoarding of stocks may be one of the causes of the price hikes and shortages.