African swine flu in China will impact Argentina’s soybean exports

The Buenos Aires Cereals Exchange (BCBA) undertook a study which shows if China’s pork production drops by 30% as a result of African swine fever, Argentina’s soybean exports will fall by 3.5m tons.

The South American country’s soymeal exports, used in pig feed, would also expect a fall of 350,000 tons in this scenario. The Asian country is in the midst of one of the worst swine fever outbreaks in history, which is likely to claim a significant part of the country’s pig population.

A 30% drop in Chinese pig production would wipe US$1.344bn from Argentina’s export revenue according to BCBA. Last year the Rosario Board of Trade (BCR) forecast that Argentina would ship a record 14m tons of soybeans to China in 2019.

In better news, Argentina’s soybean harvest reached 85% of the planted area, BCBA reported. The organ predicts a soybean yield of 56m tons in the 2018/19 season, with record national production of 3,350kg per hectare.

The Paraguayan Grains and Oilseed Traders Association (Capeco) said Argentine mills are paying US$15 per ton premiums on Paraguayan soybeans. The neighboring country’s commodity is rich in protein content compared to Argentine Soy. Argentina is expected to import two-thirds of Paraguay’s soy production.

The following graph based on Capeco data shows Paraguay’s year-on-year soybean export trends since the 1992/93 crop cycle:

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