In the first quarter 2023, 30% less soybeans were crushed compared to 2022, despite a three-fold increase in imports.

In the first quarter, 5.5 million MT of soybeans were crushed, with the industry operating at 30% of capacity. Imports in the same period totaled 1.8 Mil MT, with March hitting an all-time high.

The soybean crushing industry in our country closed the first quarter with 5.5 million tons processed, 30% below the 8.1 Mil MT that had been processed in the same period of the previous year. Taking into consideration that Argentina has a theoretical processing capacity of around 70 million tons per year, in the first quarter this industry was operating with 70% idle capacity.

March, however, saw an improvement in crushing volumes, as 2.1 million tons of soybeans were processed according to SAGyP data, up 35% from February. This was mainly due to the influx of soybeans received by the Upriver plants, mainly from Paraguay, and in good volume also from Brazil. In total, temporary imports (just for milling and re-export as meal, oils and other by-products) in March amounted to 1.39 Mil MT, a monthly historical record.

With these data, we can close the numbers for the 2021/22 vegoil campaign (April-March). In total, an amount of 35.9 Mil MT of soybeans were crushed in Argentina throughout the year, falling by 12% compared to the 2020/21 season and being the lowest volume processed by this industry since the 2012/13 season. The numbers for the new cycle are not auspicious, with crushing expected to be below 29 million tons throughout the season.

Argentina imported 1.8 million tons of soybeans in the first quarter, with a super competitive Brazil.

Argentina has imported 1.8 million tons of soybeans in the first quarter of the year alone. Of this total, 1.4 Mil MT came from Paraguay, imports that arrive mainly via the Paraguay-Parana waterway, and some 400 thousand tons from Brazil, which entered mainly by ship this year. This represents more than three times what was imported in the same period in 2022 and the year is set to break all records.

While it is a common practice for the local industry to import soybeans from Paraguay for crushing and export as oil and by-products, which is always welcome since it comes in before the national harvest and because it has good levels of protein, the volume entered this year is almost three times that of 2022.

Nonetheless, the most noteworthy case is Brazil. The South American powerhouse aims to close this season with a record production, which CONAB already estimates at 153.6 Mil MT, and is nearing the end of the harvest, already flooding global markets with soybeans at highly competitive prices. In the first two months of the year, Argentina has already received just under 400,000 tons of Brazilian soybeans, more than the 300,000 tons it received throughout the whole of 2022. At the same time, according to information from shipping companies, there are some 430,000 additional tons of soybeans that have already departed or are scheduled to be shipped to Argentina between April and the first week of May. 

Brazilian soybean port premiums have fallen to record lows in recent days amid tepid Chinese demand, as the country nears the end of threshing. Premiums fell to their lowest in 19 years, according to Cepea/Esalq data, dropping as much as -200 basis points per bushel this week at ports such as Paranagua for May shipments. Brazil would be exporting 15.2 Mil MT of soybeans in April, according to estimates by the country’s National Association of Grain Exporters (Anec), based on the shipment schedule. If confirmed, exports from the neighboring country would grow by 3.8 Mil MT compared to the 11.4 million shipped in the same month last year.

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

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