Uruguay: soybeans and meat pull average of exports down
Jun, 02, 2023 Posted by Gabriel MalheirosWeek 202322
Uruguayan exports experienced a significant decline of 31% in May, marking the eighth consecutive month of decreased international placements. The country’s major exports, including soybeans and beef, have been severely affected by turbulent market conditions characterized by a historic drought and weakened Chinese demand.
The soybean sector, in particular, has been hit hard by the worst drought the country has experienced in a century. As a result, the harvest is expected to be at least 77% lower than under normal weather conditions. This significant decline in soybean production raises concerns in the market, especially after a year of record-breaking exports.
According to the latest foreign trade report from Uruguay XXI, oilseeds, specifically soybeans, had the most negative impact on Uruguayan sales abroad in May, with a staggering 65% drop compared to the previous year. This decline follows a 67% decrease in grain exports recorded in April. These figures account for over half the overall decline in exports reported during the past month.
In May, soybean exports amounted to $164 million, whereas in the same month of 2022, the revenue reached $474 million. The primary factor behind this decline is the significant reduction in oilseed production due to the ongoing drought, which has led to a harvest decrease of nearly 25% compared to the previous year. International market prices for grain have also fallen, further contributing to the decline in export value.
The decline in Uruguayan exports is not limited to soybeans alone; beef exports have also played a significant role. In May, revenue generated from beef exports amounted to $196 million, compared to $281 million in the same period last year, representing a decline of 31%. Moreover, this downward trend in beef exports has persisted since July 2022.
Beef exports to China saw a substantial decrease of 37%, while exports to the European Union and the United States were 31% and 16% lower, respectively.
See the chart below for Uruguay’s beef exports shipped in containers between Jan 2019 and Apr 2023. The data is from DataLiner.
Beef exports from Uruguay | Jan 2019 – Apr 2023 | TEU
Source: DataLiner (click here to request a demo)
Pulp, wood, and dairy
Pulp, wood, and dairy products, alongside soybeans and beef, faced challenges in the Uruguayan export market in May. While the decline in cellulose exports was relatively small, with a 4% decrease compared to May 2022, it is worth noting the unexpected setback.
According to data from Uruguay XXI, the decline in pulp prices during the past month contributed to the reduction in export volumes. This, in turn, affected the overall performance of cellulose exports, despite the new UPM factory in Paso de los Toros being operational and expected to drive growth.
The dairy industry also experienced a decline of 12%, with total exports amounting to $71 million compared to $81 million a year ago. Although powdered milk exports remained stable compared to May last year, cheeses, curds, and butter recorded significant YoY decreases of 5% and 84%, respectively.
Brazil stood out as an exception, with a notable increase of 343% in exports compared to May last year. However, other critical destinations faced declines: exports to Algeria fell by 84%, and exports to China decreased by 95%.
In addition to soybeans, beef, pulp, and dairy products, other goods also experienced declines in export volumes. Wood and derivatives declined by 46%, rice by 22%, malt by 8%, and meat derivatives by 5%. According to Uruguay XXI’s report, only beverage concentrates (+29%) and pharmaceutical products (+13%) showed positive growth among the country’s main export products.
Source: Ámbito
To read the original news report, please click on: https://www.ambito.com/uruguay/soja-y-carne-los-motivos-principales-detras-del-desplome-las-exportaciones-n5736934
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