The lack of raw material are increasing the unproductive capacity in the oilseed industry

No good news for the oilseed industry. According to the Argentinean Ministry of Agindustry during the first quarter of the year, oilseed industry crushed 8,15 million metric tons (MMT) of soybean, versus 8,96 in 2017 and 10,35 MMT in 2016.

The lack of raw material, due to a smaller harvest, are increasing the unproductive capacity of the industry, raising fixed costs. This industry can process 62 MMT per year, but the largest volume crushed between soybeans and sunflower seed was 47,22 MMT in 2016, i.e. 76% of the total capacity.

The Ag-Ministry estimates that farmers will collect 37,6 MMT of soybean this year versus 55 MMT in the 2016/17 season. The shortage of 17,4 MMT will be partially provided by imported soybean from Paraguay, Brazil and Uruguay, and a carryover from 2016/17 harvest that Ministry estimates in 12,8 MMT. It believes that 4 or 5 MMT will arrive at the Parana ports bringing raw material.

In addition, it expected a reduction in the exports of soybean. During 2017, 7,3 MMT of the bean have been exported, versus 30,0 MMT of soybean meal and 4,8 MMT of soybean oil.