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Strong setback in soybean meal exports complicates currency settlement

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The data is compelling and leaves more than an indication of what the economy will have to face during the second month of the year. As detailed from the Rosario Stock Exchange, the schedule of flour shipments for February is around 0.6 million tons so far, although there is still time for more shipments to be recorded. In another context, at the beginning of February of last year the cargo on ships scheduled to date already exceeded one million tons. These numbers are even further from the 1.8 million tons of flour exported last February and the average of 1.7 million tons of the last five years.

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Regarding prices, the Rosario entity highlights: “The current scenario in Argentina is the main driver that is pushing prices up. The USDA in January lowered the outlook for soybean meal exports by 1.1 million tons to 26.5 million tons and made up for it with Brazil. However, it is probable that the projection of processing and exports will continue to fall, since the USDA is estimating a soybean crop (45 million tons) well above what we project from the Rosario Stock Exchange (37 million tons). ). It is interesting to note that the latest report from the USDA Foreign Agricultural Service, from its office in Buenos Aires, estimates a production of 36 million tons for Argentine soybeans in 2022/2023 (this figure is not the official USDA). The recovery in imports from Paraguay would be a counterweight to the lower availability of grain in our country.”

In turn, regarding Brazil will increase its soybean production by 23.5 million tons, which could partially offset the lower supply from Argentina. However, the increase in crush In Brazil it is reaching a limit given the current installed capacity, for which the shift from grain exports to by-products is limited.

Meanwhile, the soybean crushing industry warns that lower soybean sales by the producer are also strongly influencing processing capacity.. In December idle capacity reached 55% when a month earlier it had been 50%. In turn, for this 2023, the great obstacle to overcome will not only be the volume of soybeans that Argentina produces in the midst of the drought, but also the quality of the grain, which is already being affected by the lack of rainfall.

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Meanwhile, the Agricultural producers keep around 8 million tons of soybeans from the 2021/22 campaign unsold. Going forward, nothing suggests that this grain will be marketed, even weekly the total sales of the sector barely reach 50,000 tons. It is that the volatility of the exchange market, added to the increase in the gap between the official dollar and the parallels, discourages the possibility of commercialization.

That is why more and more force resonates in the field that the Government would seek in the short term the launch of a differential exchange for a limited time, as happened with the two editions of the Soy Dollar, to accelerate the sale of those 8 million tons from last season and also add the income of dollars from the new harvest that would arrive from next April.

For now, the good news is that after the rains of the last few days, the fields planted with corn and soybeans continue to improve, especially in the core region, and that could mean a considerable brake on the drought and therefore the reduction in production that could keep moving forward Although more rainfall is still needed and the drop in production that has already taken place is an inexorable reality, going forward the illusion that soybeans and corn will stop their yield decline is a window of hope for the countryside and of course for the economy. in general.

Source: Ambito

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