Argentine agriculture in the world: World ranking of exports

Argentine agriculture in the world: World ranking of exports

Argentina is a country with a clearly agro-export profile, the relevance of the sector is not only manifested internally, but the participation of local commodities in the world market is of great importance for international trade.

From 1960 to the present, world grain production has grown at an average annual rate of 2.3%, while the world population has grown at an average annual rate of 1.5%, according to World Bank data. While in 1960, 270 kg of grain were harvested per person, during the last season, 425 kg were harvested per inhabitant.

The most important crops are maize and wheat in terms of volume, reaching a combined production of 1,946 million tonnes in the 2022/23 season, an increase of 65% over the last two decades. Soybean production and its derivatives are increasingly gaining ground on the international scene, and in little more than twenty years the annual volume of soybean production has increased 2.3 times.

Argentina’s participation in the international agricultural commodities market

Argentina is a producer country with a clear export profile: of the almost 130 million tonnes harvested on average between 2017 – 2021, 93 million tonnes have been destined for the foreign market, i.e. 70% of the harvest is exported each year. On the other hand, when analyzing the importance of agro-industrial exports, they represent two thirds of Argentina’s total exports of goods. In the current context of international prices and leaving aside the historic drought of the 2022/23 season, on average, foreign shipments of the main agro-industrial complexes represent USD 32 billion.

Soybean complex

Argentina is the leading exporter of soybean oil and soybean meal, in both cases accounting on average for 40% of the world market.

Soybean oil exports average 5.2 million tonnes per year. Argentina is by far the world’s largest supplier, tripling the volume exported by the second largest, Brazil. As in the meal market, the latter has been steadily increasing its oil exports, but still far below the Argentinean figures.

Sunflower complex

Among the main products of this complex, Argentina is in third place, accounting for 7% of world exports of sunflower meal and oil. It is seen as a market with a growing national presence, trading an average of 1 million tonnes of each by-product during the last two seasons. At the international level, the sunflower oil and meal market is largely dominated by Russia and Ukraine, accounting for more than 70% of annual exports between the two products. Ukraine exports an average of 5.6 million tonnes of oil and 4.4 million tonnes of sunflower meal per year, while the Eurasian giant markets 3 and 1.7 million tonnes respectively.

As for Argentinean exports by destination, as with soya oil, India is a fundamental destination for Argentinean sunflower oil, accounting for 30% of exports, followed by Chile, Brazil, Mexico, Paraguay and Uruguay as important buyers. In addition, Argentinean oil also supplies the oceanic market, which accounts for 4% of exports.

Sorghum

Argentina is the world’s second largest exporter of sorghum; on average, during the last five seasons (excluding 2022/23), it has exported 1 million tonnes annually. However, the country has had an outstanding performance during the 2020/21 harvest, exporting 2.2 million tonnes and 1.7 million tonnes in 2021/22. Meanwhile, the United States leads the export podium for this cereal, accounting for an average of 68% of the market with average exports of 5.4 million tonnes in annual terms.

On the other hand, China currently accounts for almost the entire import market for this cereal at world level. At other times in history, Japan has accounted for a large part of global sorghum imports.

Maize

Argentina is the second largest exporter of maize in the world on average between the 2017/18 and 2021/22 seasons, with an annual export volume of 31 million tonnes respectively. However, this situation could change as Brazil is consolidating its position in the export market and changing the positioning of the main countries.

Overall, 85% of world maize exports are accounted for by the United States, Argentina, Brazil and Ukraine. The North Americans hold the first place in the world ranking, exporting an average of 58 million tonnes over the last five seasons. However, since the last commercial cycle, Brazil has been in first place, with the intention of claiming the position as its own. Argentina would eventually end up moving to third place and the leadership would be dominated by Brazil and the United States.

Wheat

Russia tops the list as the main exporter, although it has been able to maintain an annual average of 36 million tonnes in recent years, the 2022/23 season marks a significant jump in exports to 47 million tonnes according to the USDA. This is due to a strong production performance that increased by 17 million tonnes last year to no less than 92 million tonnes. For the new commercial year 2023/24, production is estimated at 90 million tonnes and exports could be a record 50 million tonnes respectively. The European Union conglomerate is already in second place, accounting for 16% of the market, followed by the United States with 13%, Canada with 12%, Ukraine and Australia with 9% each. Finally, Argentina appears with average exports of 11.6 million tonnes of wheat per season and a 7% share of the world wheat market.

The main buyer of Argentine wheat is Brazil, which is a net demander and, due to its proximity, accounts for almost half of Argentina’s wheat exports. Then, shipments to Chile, Perú and Central American countries also stand out. The African continent is also a key market for Argentine wheat, accounting for 22% of annual external purchases of the cereal. Algeria is the main importer in this region, although in the last five years, Argentine wheat has arrived in 20 African countries. Finally, the Southeast Asian nations complete the wheat picture, with Indonesia standing out as the main buyer in the area.

Biodiesel

The Argentinean biodiesel industry has been going through a difficult situation during the last year due to the impact of the drought, leading to minimum levels of exports. In the international arena, the country currently ranks sixth in the ranking of the main global exporters. The EU is ahead with 34% of the market, followed by the United States, Indonesia and Brazil.

The main destinations for domestically produced biodiesel are the countries of the European Union, mainly the Netherlands, which is consolidating its position as the gateway for this Argentinian product to the European market.

Outlook for the 2023/24 season

According to estimates by the US Department of Agriculture and BCR’s own projections, in the new 2023/24 season Argentina will maintain its undisputed position on the international soybean oil and meal market. At the same time, expectations of a large corn harvest would allow Argentina to maintain its second position in the international cereal market in the face of the adverse weather conditions affecting Brazil, and in wheat it is expected to maintain its seventh position worldwide. However, sorghum, sunflower oil and biodiesel would fall back a few positions in the world ranking.

Source: https://bcr.com.ar/

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