USA – Bunge Ltd, multinational food and agribusiness company is considering exporting US soybeans to Argentina and the move would be ratified depending on the margins.
The plans were revealed by Soren W. Schroder, chief executive officer of Bunge at an investor event in New York adding that they look forward to bumping up soybean supply in Brazil and Argentina.
He said that there could be periods of time in the late summer and fall of this year when there are some trade flows of U.S. soybeans to South America.
According to him, the margins do not justify such moves and Bunge does not believe the volume of such trade flows will be particularly significant.
“On paper, there will be a flow,” Schroder said.
“Margins at the moment, we don’t believe necessarily justify that, but there could be periods in the late summer and fall where some flows of beans will find their way to Argentina.
We know that some business has already been done.
We don’t believe it will be a volume sufficient to change the overall global crush margin structure.
“But, there’ll be some beans that flow in. If margins justify it, we will participate. But they have to justify it.”
In Argentina, 7 million to 8 million tons of capacity won’t be affected this year because of the crop shortfall which will now have to be made up for in Brazil, in the U.S. and in Europe, he said.
Bunge is no doubt looking for alternative markets after China its top soy buyer, with valuations of upto US$12 billion of the crop last year, threatened a 25% tariff on US soybean imports.
“Nobody’s willing to take the risk of committing to U.S. soybeans to China in the current context, knowing that there could be a $100 penalty from one day to the other, and no way of managing that risk,” Schroder said after the company reported a quarterly loss.
Bunge sustained a US$21 million loss in the first quarter ended March 31 but the company solaced the results were a transitional signal into a period of much improved margins and performance, especially in soy crush.