Argentina's giant soy processing plants are running out of the oilseed after a historic drought cut the harvest in half, the head of the country's grain export chamber told Reuters, leaving well over two-thirds of capacity idle. of factories.
For years, the South American country was the world's largest exporter of processed soybean oil and meal. However, this year the harvest was devastated. Pressure from the indebted government increased on grain exports, aiming to bring in dollars. This resulted in the loss of the leadership position.
“We are in a disastrous year,” said Gustavo Idigoras, president of the chamber of grain exporters and processors CIARA-CEC. He expects idle capacity at the country's crushing plants, located along the Paraná River, to increase to more than 65%.
“Idle capacity could grow significantly,” he said, highlighting that the next soybean harvest will take place in April and there will probably only be 3 million tons of oilseed left by the end of the month to meet demand until then.
“With these 3 million tons, we will have to survive until May 2024,” he said. “We want to turn the page to see if next year we will have a better climate and greater agricultural production.”
Increased idle capacity affects grain trading giants
The likely increase in idle capacity will hit major grain traders such as Bunge and Cargill in Argentina, and has opened the door to rival producers. Thus, Brazil, which had an abundant harvest, surpassed Argentina in soybean meal exports.
Drought has severely affected Argentina's 2022/23 soybean harvest. Production fell to around 20 million tons. As a result, the country had to resort to importing soybeans from neighboring countries, such as Paraguay, Bolivia and Brazil, in an unprecedented volume. This was necessary to ensure the continuous operation of its crushing plants.
“Argentina could total 10 million tons of (soy) imports this year,” said Idigoras, in a new estimate. Government data reveals a record 8.2 million tons of soybean imports through August. This already exceeds the 6.4 million tons in 2018. This record is comparable to the year 2018, when there was also a drought.
Argentina records the lowest amount of soybeans crushed in eight years
According to the Argentine Ministry of Agriculture, between January and August, the volume of crushed soybeans in the country fell by 27% compared to the previous year, to 19.6 million tons, the lowest value for that period in official records dating back to 2015.
Idigoras stated that he did not expect anyone to officially declare any wheat sales in the coming months for the 2023/24 harvest, as the agreed shipments from the previous campaign were finally met. Exporters were allowed to postpone them due to the drought.
Rosario's local grain exchange estimates a better volume of 15 million tonnes for the current season, cutting last season's wheat harvest in half to around 11.5 million tonnes.
“There are no new (export) records, but there are records that were rescheduled from the previous campaign. This is why we will not see new registrations in the coming months,” said Idigoras.
Source: Maximilian Heath | Notícias Agrícolas
