(Chart by www.eFarmNewsAr.com based on the Ag-Industry Secretariat statistics)
Buenos Aires, March 5th. There are two large farm cooperatives in Argentina. One of them is Asociación de Cooperativas Argentinas (ACA), and the other is Agricultores Federados Argentinos (AFA). Technically, ACA is a second degree cooperative, formed by 150 first degree farm cooperatives, which involves around 50,000 Argentine farmers while AFA is a first degree cooperative formed by 36,000 farmers.
In the grain supply chain, both ACA and AFA are major players that have a key role in the grain origination. Largest world commodities companies draw on to them for accessing to huge grain volumes in a very short term.
But also, ACA and AFA run grain export business. ACA has port facilities at Rosario (San Lorenzo Port), in the Parana Up River, and at Quequén, in the South of Buenos Aires Province. Currently, ACA is mounting a third port in Timbúes, also in the Paraná River. AFA has not port facilities, but they are trying to have one on the Paraná River, through a governmental concession.
During last decade both farm cooperatives increased its share in the grain export business. Both passed from 6% of the total grains exports in 2006 until to reach 14% in 2014; the year before they had shipped 5.1 million metric tons of grains.
But after 2014 they began to lose market share. The volumes remained steady between 4 and 5 MMT, but it got clearly a declining trend in its share.
Last year, both cooperatives only reached 9% of market share, shipping 3.6 MMT. The most harmed was AFA, which exported 315K tons, the lower volume since 2009, when they shipped 66K tons. For AFA, the export business unit dropped 73% in respect to 2017
Meanwhile, ACA lost 20% of grain volume from one year to the other, exporting 3.2 MMT in 2018.
But, why this is happening?
The last heavy drought reduced the availability of grains, cutting 20 MMT of the soybean output. Bu it’s probably that the financial costs (interest rates were above 50% during most of the last year) had impacted over the farm cooperatives competitiveness. In fact, in a recent interview, president of ACA, Claudio Soumolou said that the farmer stayed harmed by financial costs. “These interest rates are impossible to pay”, he remarked, adding that the lack of predictability is also damaging the agriculture business. Mr. Soumoulou referred to the re-impose of export taxes to cereals, when wheat and barley were already planted. “We need that estimated costs in the beginning of the campaign be the same in the harvest. We can’t afford changes in the rules of play”, he added.
You can also read ACABio expands its corn-based ethanol operation. The reasons behind.