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Argentina’s oilseed crushing rate forecast to drop

Posted by Eduardo Moreno

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The rate of oilseed crushing in Argentina could drop to 56% by the end of the 2021/22 production cycle, AgriCensus reported on 8 October from a new study by local oilseed crushing and exporters chamber Ciara-CEC.

If realised, this rate would be one of the lowest in a decade, according to the report.

In the 2020/21 cycle, the crushing rate reached 62%, the report said.

“The oilseeds crushing industry continues to process soybeans with negative margins... The strong demand for bean exports has set the pace of the trend in prices for available goods, with slightly positive margins,” Ciara said in the report.

The report also noted the gradual decline in Argentina’s capacity over the last decade, and the rise of production in neighbouring Brazil.

“In the last 10 years, soybean production in Argentina has had a drop of 6M tonnes – 9% – from 50M tonnes to 44M tonnes,” the chamber said in the report.

In the same period, the greatest increase in production was in Brazil, from 75M tonnes to 144M tonnes, while soybean production in the USA increased by 28M tonnes, from 91M tonnes to 119M tonnes, the report said.

“Argentina has lost market opportunities, which have been taken by the USA and Brazil, who were able to supply the increased demand and world trade of soybean and derivative products,” the chamber added.

The Argentine sector crushed a total of 29.5M tonnes of soybeans in the January/August period, according to Ciara’s monthly monitor, marking the third highest volume on record.

In August alone, the sector crushed 3.57M tonnes of soybean, up from 3.43M tonnes in the same month the previous year, Ciara said.

Argentina is forecast to crush 40.5M tonnes of soybeans this year, according to previous reports, a 12.5% increase compared to the 2020 volume of 36M tonnes.

Source: Oils & Fats Internacional (OFI)