SAO PAULO: Argentina became the second main destination for Brazilian soybeans in the first five months of 2023, as it had to boost imports in response to a historic drought that severely affected its crop.
Brazil’s soy exports to its neighbour from January to May reached 1.92 million metric tons, while the volume shipped in May alone was 978,500 metric tons, official data showed, while analysts still see room for more. Argentina, the third largest global soybean producer behind Brazil and the United States, saw its crop shrink 43% to 25 million metric tons in 2022/23, according to figures from the US Department of Agriculture (USDA). Argentina’s Rosario grains exchange estimated an even smaller harvest, closer to 20.5 million metric tons. With a large export industry for soy oil and meal, Argentina had to increase imports of the raw bean, which are expected to double to about 9 million metric tons in the current season.
Although it was expected that Brazil would meet much of this demand, the volume exported in May was enough for Argentina to overtake Spain as the second largest buyer of Brazilian soy, behind China, the data showed. The increase in shipments of Brazilian soy helped improve supply to Argentina’s crushers, which also began to buy more beans from local producers following the government’s so-called ‘soy dollar’ program, said Gabriel Faleiros, analyst at S&P Global Commodity Insights.
This tends to limit, in the very short term, the need for a new avalanche of imported Brazilian soybeans, he added, while also agreeing that volumes imported by Argentina are still expected to increase throughout the year.
S&P Global Commodity Insights reduced its forecast for total soybean imports by Argentina this year to 9 million metric tons, from 10 million previously. Argentina should import about 5 million metric tons from Paraguay this year. Brazil is still expected to export an additional 2 to 3 million metric tons to the neighbouring country, Faleiros said.
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