In the agricultural equivalent of coals to Newcastle, the No. 3 soybean grower in the world, Argentina, is buying soybeans from one of its major competitors, the United States, because of drought damage to its own crop. The U.S. agricultural attaché in Buenos Aires says imports of up to 1 million tonnes are possible in the near future as soybean processors scramble to keep their plants running. Argentina leads the world in exports of soybean oil and meal.
The U.S. soybeans would be the first imported to Argentina in more than two decades, said the attaché in a report released by the USDA. Attache reports are not official USDA data. Paraguay traditionally is the dominant source of Argentina’s soy imports, with Brazil as the backup supplier.
Argentina harvested nearly 58 million tonnes of soybeans a year ago, but this season’s harvest is forecast by the USDA at just 39 million tonnes, primarily because of severe drought. “Private local sources estimate production may be even lower,” 36 million tonnes, said the attaché. “In addition, producers in Argentina that can afford to are holding a significant inventory of beans on speculation of higher prices. … Therefore, the local crushing industry needs to import more soybeans than what it normally imports to maintain its normal processing levels. To date, plants are running at 70 percent capacity, but it could drop because of a smaller local soybean supply.”