Buenos Aires, July 11th. “Every time that rains soup it catch us with the fork in the hands”, says Javier Bujan, manager at Kimei, a grain commerce house based at Buenos Aires. Mr. Bujan its refers to the commercial war between China and the United States, that had derived in the imposing of a 25% import tax to the US soybean. “If we (Argentina) would have had 55 or 57 million metric tons of soybean output this season, we could export to China 10 or 12 million, and catch a premium price respect Chicago”, explains.
But the severe drought that affected the Argentine farming last season cut the soybean harvest to 36 million metric tons. Thus, the oilseed industry is prioritizing the crushing to export meal and oil, over the bean. Even, it is expected that industry imports over 4 million metric tons of raw material this commercial year, mainly from Paraguay, but also from the US. “Now, with an output of 119 MMT and export for more than 72 MMT, Brazil is taking an advantage thanks to the US protectionist measures”, add Mr. Bujan.
In dialogue with www.eFarmNewsAr.com, a source from the oilseed industry explains this particular moment. “Argentina is the world largest soybean meal export, but we don’t export even a gram to China. For this reason, China import duties over US soybean have no impact for us. Local industry has some moderate expectative that China finally accepts to import soybean meal from Argentina instead of the bean. In the last visit to that country, in a mission heading by AgIndustry Minister Luis Etchevehere, it talked about the habilitation of local crushing facilities by regulatory authorities of China”, explain the source.
According to official data, during 2017 Argentina exported 30.04 MMT of soybean meal, 4.80 MMT of soybean oil and 7.34 MMT of soybean. China bought 6.36 soybean (or 87% of total exports), but only 1,000 tons of oil and none tonne of the meal. “Our main customers for soybean meal are in Europe, SouthEastern Asia and the North of Africa, not in China”, says the source.
Meanwhile, the Foundation for Agriculture International Negotiations (INAI as its acronym in Spanish) released a document trying to estimate the impact of the commercial war between the two largest world economic powers. “This season there will be no impact, due to harvest is over, but if China sustains the import duties, for the next season (2018/19) Argentinean farmers could receive a plus price around 6.5 dollars per tonne, while US farmers could see a discount around 15.5 dollars”, explains Nelson Illescas, senior analyst from INAI talking with www.eFarmNewsAr.com.