How does it affect Argentina?

In early September, soybean processing margins were negative after hitting a record low in June. However, margins improved during that month due to lower inventories.

How does it affect Argentina?

Argentina is the world’s third largest producer of soybeans and the largest global exporter of oilseed meal and oil, and China is one of the main buyers. But the bad news from China has long been reflected in the sector’s predictions: a contraction in soybean production made Brazil and the United States begin to gain the ground that Argentina lost.

For this agricultural cycle, 16.5 million hectares are expected, being the smallest area in 15 years, and a production of 44 million tons, the same amount as the previous year. In the country, the area planted as well as production has been falling. Taking the 2010/11 campaign, the area reached 18.5 million hectares and 49.2 million tons were harvested, according to data from the Buenos Aires Cereal Exchange.

The production record was in the 2014/15 period, with a harvest of more than 60 million tons in 18 million hectares (100,000 hectares less than the previous year that had been historical). But from this cycle the harvest and the surface began to decrease to 43.5 million tons in the 17.2 million hectares of the 2020/21 cycle.

Thus, comparing the 2010/11 campaign versus the 2020/21 campaign (the lost decade), the area and production fell by 11%. Some of the aspects indicated by a loss of market share have two main reasons indicated by the sector: tax pressure (33% of withholdings) and the lack of clear policies for the introduction of new technologies such as a new Seed Law or greater control in the use of biotechnology.

In any case, despite the obstacles indicated by the soybean complex to grow, it continues to be the main generator of dollars in Argentina. In October, foreign exchange earnings from agro-industrial exports set a new record as a result of international grain prices. This was reflected in the monthly report published in the last hours by the Chamber of the Oil Industry and the Cereal Exporter Center (CIARA-CEC).

In October the companies grouped in CIARA-CEC settled 2,416 million dollars, a decrease of 1% in relation to September and an interannual increase of 40.8%. In addition, in the first 10 months of the year the contribution was 28,087 million dollars, 66.6% more in relation to the same period last year. Both figures, said from the entity, are a historical mark for this century. The record contribution is explained by the sustained growth in international prices that began in September 2020 and reached its maximum peak last May, when soybeans in the Chicago market exceeded $ 600 per ton.

A fall in purchases from China forces Argentina to regain ground and advance in new markets if it seeks to take advantage of the good scenario of international prices.

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Helen Hernandez is our best writer. Helen writes about social news and celebrity gossip. She loves watching movies since childhood. Email: Phone : +1 281-333-2229

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