Argentina forecast to export record volume of soybeans to China in 2019

The Rosario Board of Trade (BCR) forecasts that Argentina will ship a record 14m tons of soybeans to China in 2019 if its trade war with the US continues.  Raw bean shipments from the Latin American country are expected to increase greatly next year to make up for the slow down in imports of the commodity from the US after China slapped a 25% import tariff on them.  Argentina’s soybean production is forecast reach up to 55.5m in 2019, compared with 37.8m tons in the previous drought affected season. The increased demand for soybeans means that Argentina’s soybean crushing plants are reported to be working at only 55% capacity.

Supporting Sources:

https://fp.brecorder.com/2018/12/20181211430246/

Argentine soyabean exports to China could jump to a record 14 million tonnes this season if the trade war between China and the United States continues the Rosario grains exchange said on Thursday, as output rebounds from last year’s drought. China has all but stopped buying soyabeans from the United States. This has driven down the price of US beans. As a result, US soya crushers are shipping to soyameal markets previously supplied by Argentina, which in turn is exporting more raw beans, mainly to China.

With Argentine crushing plants working at only 55 percent capacity, the country is expected to increase its shipments of raw beans after the next harvest starts in March. “Under current conditions, in which shipment from North America to China have slowed sharply, we would expect a big increase in the export of raw soyabeans from Argentina,” said Emilce Terre, head analyst at the exchange located in Argentina’s main grains exporting hub of Rosario.

She said soyabean exports could hit 14 million tonnes, up from the country’s previous record high of 13.3 million tonnes in the 2009/10 crop year. In the 2017/18 season, which was hobbled by months of hot, dry weather on the Pampas farm belt, Argentina exported only 4 million tonnes of beans versus 7.2 million tonnes in the 2016/17 crop year, according to exchange data. Exporting soyaoil and soyameal from the crushing plants that dot the banks of the Parana River is usually more profitable for Argentina than exporting raw beans. But the trade war has turned that equation on its head, making bean exports more profitable. The price of soyabeans in the United States plummeted since China placed a 25 percent tariff on imports, making US soyameal and soyaoil manufacturing more cost effective than in Argentina.

Analysts say 95 percent of Argentine soyabean exports are currently going to China. The rest go to Asian countries like Vietnam, Singapore and Thailand. The US Department of Agriculture (USDA) forecasts Argentina’s 2018/19 soyabean exports at 10.0 million tonnes, up sharply from what the USDA estimated was a 4.1 million tonnes of soyabeans shipped overseas in the previous year. Argentina’s upcoming harvest is expected to reach 55.5 million tonnes, according to the USDA, versus 37.8 million tonnes in the previous, drought-hit, season.

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