Rosario Stock Exchange predicts Argentina could increase the export of soybeans to China in 2018/19 campaign.
According to the entity data, soybean production that would reach 50 million tons, grain shipments would amount to 14 million tons, double the amount last year. And the rest, between 36 and 38 million tonnes, would go to factories installed in Gran Rosario the main agro-export pole in the world, for processing as flour or oil.
Mostly, is created as the result of an attractive grain price for a commercial war between the United States and China and the there is no incentive to process this part as a by-product From February 2019 all soybean products will have the same retention (23%) and then will gradually decrease until they reach 18% in December. Previously, before the changes introduced by Macri in August, there was a difference of 3% for boosting the industry.
However, Last week, China returned to buy soybeans from the United States after a 90-day truce agreed at the G20 summit held in Argentina. That was confirmed by the same US President Donald Trump, who said that China is buying "enormous amounts" of American soybeans. According to Reuters, at least 500,000 tons have been reported, but it is said that it could be up to 2 million tons.
Before this new context, Rosario's Directorate for Economic Studies of the same Entity pointed out Clarin Rural "is the first gesture. In order to consolidate and reduce trade tensions, the soybean market would be normalizedAccordingly, as they explained, each of the actors would return to previous commercial warfare schemes, and Argentina could export a smaller amount, giving priority to its oil industry to produce more flour and oil.
In any case, beyond this approach, the difference in price still exists. On Friday, the theoretical FAS for export was $ 242.9 per tonne, and the theoretical FAS for the industry was $ 227.1 ($ 8.597) per tonne.
It should be noted that Soya is the main export product for Argentina. According to INDEC data, in 2017, 30.3 million tons were sent abroad and reached USD 9,300 million. Both soya oil (which includes both refined and raw) took third place on the export floor last year, with 4.9 million tons that generated foreign exchange for $ 3.725 million.
This year, surely these numbers fall because only 32 million tons of oilseeds are produced by severe drought who suffered a wet pampa in the middle of the summer. So far, companies have had to import 5 million tons of soybeans to fulfill their commitments.
This war has become very important for the region because the United States is the main producer and exporter of soybeans, and China is the largest buyer of this cereal around the world. With 25% of the tariff imposed by the Asian giant on the export of Yenki, the values of North American soybeans fell.
Consequently, North American soil treats more soy than otherwise generating more competition in flour and oils around the world.