Buenos Aires, November 2nd. As we said repeatedly, the severe drought occurred during last summer cut the soybean output from expected 55 million metric tons to less than 37 million. With an installed capacity to crush 60 MMT, oilseed industry is suffering the lack of raw material. By this reason, it was expected that soybean exports would be reduced to a minimum during this commercial year, in favor of the export of meal and oil.
This occurred until August when the Government rose the export tax to soybean and eliminated the historical gap between the raw material duties and its by-products. In this framework, the trade war between the US and China shocked the local market.
By this way, during October, traders registered an unusual volume of one million tons of soybean exports, compared with less than 90,000 tons in October 2017.
The largest registrations were made by ADM Agro SRL, the local branch of Archer Daniels Midland, a company that has not any crushing plant in the country. This company registered a half million tons to ship during December. Other four companies (Agricultores Federados, Amaggi, Asociación de Coooperativas Argentinas and CHS), all of them also without crushing plants, registered additional 183,000 tons.
“It is unfortunate”, a senior official from a large oilseed company describe the situation. It is while the crushing industry must import soybean to reduce its unused capacity, traders without assets in the country export the bean to China.
The Buenos Aires Grain Exchange has estimated that during the next commercial season, Argentina will export more than 14 MMT of soybean, if the US-China trade war continues unsolved.