Argentina soybean imports rise on low production estimated at 56M Tons

USA – Soybean imports in Argentina continue to rise with production estimated to be slightly lower at 50 million tons in 2018/19 as a result of the recent drought faced in the country.

According to a Dec. 4 Global Agricultural Information Network (GAIN) report from the U.S.Department of Agriculture, Argentina has imported more than 3.5 million tonnes of soybeans in 2017-18, a 135% increase over the previous year.

Fueled by drought, lower domestic soybean supplies necessitated a dramatic increase in soybean imports for the crush industry.

Recent rain delayed sowing in select areas of the country leading to planting progress below the same period last season.

Producers are said to be suffering from increasing input costs that are delaying input investments, like fertilizers, which may lead to less robust yields.  

Local brokers estimate imports could reach up to 5.5 million tonnes by the end of the marketing year, the USDA said.

Within this total, U.S. soybean exports to Argentina reached nearly 450,000 tons during this same period, with expectations of greater shipments to come in the next few months.

U.S. soybean exports to Argentina are expected to reach about 1.5 million tons within the next few months.

Argentina is expected to import 5.3 and 4.5 million tons in 2017/18 and 2018/19 respectively due to the rapid rise in imports.

Growth in exports

USDA said exports will continue to grow with the recent elimination of the export tax differential between soybean and soybean product (meal and oil).

This trend is also helped by U.S.-China trade tariff situation which is discouraging soybean processing.

“Producers continue to monitor closely U.S.-China trade relations and their effect on global soybean prices and trade flows.

Producers and local soybean industry hope that the situation may deliver them higher premiums.

Based on the current imposition of Chinese tariffs on U.S. soybeans, Argentine producers, which are currently benefiting from a divergence in U.S. and Argentina soybean prices, expect to receive an additional US$10 billion in soybean export returns, given these ongoing conditions,” read the GAIN report.

Argentina imports soybeans for processing from Paraguay, the United States, Brazil, and Uruguay an effort to reach historic crush levels.

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