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Argentina’s grain sector is set to recover in the coming years

Nov, 22, 2018 Posted by datamarnews

Week 201846

As Argentina recovers from its worst drought in 60 years, the country’s Agriculture Secretariat predicts that 140m tons of grain will be harvested in the 2018/19 crop year, up 25% compared to the last crop year. Moreover, the country might be able to utilize an additional 60m hectares of grain acreage to boost production in the next season. According to the government estimate, Argentina will yield 54.2m tons of soybean from the current harvest, up 44% compared to the previous harvest. The corn harvest is estimated to reach 49.68m tons, and wheat 20.14m tons during the same period.

Argentina is hopeful that it will be able to revive its flagging soymeal exports, by cutting a deal with China in order to supply the country with soymeal livestock feed for the first time. The South American country has traditionally been one of the world’s top soymeal exports but has been one of the worst affected by the US-China trade war, which has led to the generation of a glut of cheap soy in the US. As a result, US soymeal exports have soared to a record high. The Argentine government believes the country will export a record 16m tons of soybeans to China during in the next crop year, and will even import over 2m tons of cheap US soybeans. However, if the trade war is somehow resolved, the South American country’s supply will return to the usual 7m tons. This year, Argentina imported 1m tons of US soybeans for the first time in 20 years.

Supporting sources

URL: http://en.mercopress.com/2018/11/09/argentina-expects-a-record-harvest-of-140-million-tons-of-grain-and-oilseeds

Argentina expects a record harvest of 140 million tons of grain and oilseeds
Friday, November 9th 2018 – 09:58 UTC
The government estimates the 2018/19 harvest will bring in 54.2m tons of soybean, a 44% increase on last season’s 37.78 million tons; and 49.68 million tons of corn

Despite last year’s fierce drought, farmers are again strongly committed to Argentine agriculture, Secretary Luis Etchevehere said

Argentina is expected to harvest some 140 million tons of grain in the 2018/2019 season, the largest crop in the country’s history, according to Argentina’s Agriculture Secretariat.
 The result would represent a 25% increase on last year’s harvest of 112 million ton, government officials said, addressing the recent 3rd Conference on Agricultural Perspectives at the Buenos Aires Grain Exchange.
The event addressed the situation facing Argentine and international markets, as well as productive and climatic conditions.
“Despite the fierce drought, Argentine farmers have again put their bets on the country demonstrating its strong commitment to agriculture, which is the engine of our economy”, Agriculture Secretary Luis Etchevehere said, speaking from China where he is conducting a trade mission.
“To continue moving forward we need a new Seed Law, which is in line with all products. Together with environmental issues and sustainable development we will be able to generate more added value that will ultimately generate genuine wealth”, Santiago del Solar, the Secretariat’s Cabinet Chief, said at the opening of the event.
For his part, undersecretary of Agricultural Markets, Jesus Silveyra, stressed the need to “to demonstrate the enormous opportunities that we have. Argentina has the potential to harvest an additional 60 million hectares, in addition to very important resources such as water, climate, soil”.
The government estimates the 2018/19 harvest will bring in 54.2 million tons of soybean, representing a 44% increase on last season’s 37.78 million tons; and 49.68 million tons of corn.
For wheat, a new record harvest of 20.14 million tons is expected, with an intention to sow of 6.2 million hectares in 2019. The forecast for barley production is for 4.48 million tons, while sunflower production will hit 3.7 million tons and sorghum 3.74 million.
This year the failure of summer crops because of the drought contributed to worsen the vulnerable financial situation of Argentina which was forced to appeal for support from the IMF.
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Argentina eyes soymeal export approval from China this month

Argentine soy crushing factories want to revive their business with a deal permitting them for the first time to export soymeal livestock feed to China, a pact that the government said was being hammered out this week in Beijing.
The crushing plants that dot the banks of the Parana River, Argentina’s main grains thoroughfare, are working at only about half their capacity due to fallout from the U.S.-China trade war. The government hopes to announce the soymeal-to-China agreement at the G20 meeting in Buenos Aires later this month, the head of the local grains exporting chamber said on Tuesday.
Argentina, long the world’s top exporter of soymeal, is one of the country’s damaged by the U.S.-China conflict, which has shifted global commodity trade routes and distorted prices.
Beijing has slapped a 25 percent tariff on U.S. soybean imports, effectively halting soybean shipments to China. The resulting glut of cheap soy in the United States has lowered input costs for U.S. meal crushing factories, making them more profitable. U.S. soymeal exports have soared to a record high, topping 12 million tonnes in the most recent marketing season, according to the U.S. Department of Agriculture.
This has hit the soy meal manufacturing industry in Argentina, already reeling from a drought on the Pampas farm belt that dried up soybean supplies earlier this year.
“We expect the permission to export soymeal to China will be granted before the end of this year,” Gustavo Idigoras, president of the CIARA-CEC chamber of grains exporter and soy crushing companies, told Reuters in an interview.
The opening of China to Argentine meal would be a boon to the South American country, whose large processing plants located between the Pampas and the deep-water ports of the Parana make it the world’s most efficient place to crush soy.
China has long relied on imports of whole soybeans to be crushed locally into meal and cooking oil, instead of importing the end products themselves as this protects jobs in China’s food-processing industry.
But while cut off from U.S. soybeans due to the trade war, Chinese authorities are looking for ways to ensure a steady supply of feed for the country’s massive pork sector.
Argentine officials have been working to “finalize” a deal with China, the world’s largest hog and pork producer, since at least August.
A government spokesperson confirmed Etchevehere was in China this week, and that the pact was expected to be signed soon.
Argentina will host U.S. President Donald Trump and Chinese President Xi Jinping at the G20 leaders meeting starting on November 30.
“The Argentine government’s objective is to have the export license before the arrival of the president of China in Argentina. If not, then to announce that the license has been granted during the G20,” Idigoras said.
Argentina is expected to export 16 million tonnes of soybeans to China, Idigoras said, a record volume if realized.
If the U.S.-China trade dispute is resolved, he said he expects Argentina bean shipments to China to return to a normal amount of about 7 million tonnes.
This year exports were chopped to 4 million tonnes by a the months-long drought that baked the Pampas early this year.
As a result, Argentina has imported one million tonnes of soybeans from the United States, Idigoras said, marking the first time in 20 years that Argentina has imported U.S. beans.
The amount of U.S. soybeans imported by Argentina is projected to grow to more than 2 million in 2019 if the trade war continues, he added. If the trade war ends, he said the amount of U.S. soy imported to Argentina should go back to zero.

 

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