SAO PAULO: Brazil's soy crushing plants were used less in 2013 than in the previous year, with installed capacity rising slightly and volume processed falling, according to crusher's association Abiove.
Abiove, which represents international firms like ADM , Bunge, Cargill and Louis Dreyfus , expects 35.4 million tonnes of soybeans to be crushed in 2013, or 60.3 percent of current crushing capacity.
In 2012 the industry processed 36.4 million tonnes, which was 63.7 percent of capacity. Crushers used less capacity in 2013 even after harvesting Brazil's largest soybean crop ever, or some 81.5 million tonnes.
Abiove's lead economist, Daniel Furlan Amaral, said the increased idleness was due to taxes that discouraged processing.
Brazil's tax structure gives producers incentives to export raw soybeans, and the country was the world's largest exporter of beans in the 2012/13 season.
Neighboring Argentina has taken the opposite approach, encouraging the processing of soybeans, and is now the world's top soymeal and soyoil exporter.
After President Dilma Rousseff's government lifted the so-called PIS/Cofins social-security and payroll tax early this year from the cooking-oil industry, the industry was left holding large amounts of worthless tax credits.
Soyoil producers had previously been able to use those credits against other tax liabilities, but many of those taxes were also lifted. The changes have hurt the crushing industry's profit margins and resulted in idle processing plants.
"As we have no more tax operations, you are left with a credit that has virtually no use," Amaral said. "The solution would be to compensate the industry."
Installed capacity increased in top soybean state Mato Grosso in 2013 and it is now the largest soybean processing state in the country.
Amaral said interest in the industry was waning, however. "Today it's not attractive, we aren't seeing much movement in investments," he said.
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