In the past few months, Argentina has reduced soybean production due to drought and has switched from a soybean exporting country to an importing country. Argentina and one soybean exporting country, Brazil, are close at hand and should have established supply relationship nearby. Now Argentina has established a supply chain that spans the equator and imports soybeans from the United States for the first time in 20 years.
Brazilian Soybeans Account for 94% of Imports
China usually imports most of the soybeans from the U.S. in the fourth quarter, and the fourth season was the period when the U.S. soybeans dominated the market after the harvest, because Brazilian soybeans are still in the process of maturity.
However, Chinese buyers are buying large amounts of soybeans from Brazil out of season, because of concerns of short supply following the 25% tariff that Beijing imposed on U.S. soybeans on July 6 in response to U.S. tariffs on Chinese goods.
China’s Brazilian soybean imports in October nearly doubled from the same period last year, reaching 6.53 million tonnes. Earlier, the General Administration of Customs released data. In October, China imported 6.92 million tonnes of soybeans. It means that China’s imports of soybeans from Brazil in October accounted for 94% of total imports.
At the same time, the number of U.S. soybeans imported by China fell to just 66,695 tonnes, compared with 1.33 million tonnes in the same period last year.
Argentina Becomes the Largest U.S. Soybean Buyer
Because of poor sales, U.S. soybean farmers are faced with the dilemma of having no warehouses to store. Right now, they have found a new buyer – Argentina.
According to the U.S. Department of Agriculture (USDA), from September 1 to November 22, nearly 1.3 million tonnes of U.S. soybean have been inspected for export to Argentina. USDA data show, this figure is zero compared to the same period last year.
Like the United States and Brazil, Argentina is also the world’s leading soybean exporter. At the same time, Argentina is the world’s largest soybean meal exporter. Usually, Argentina processes soybeans and exports soybean meal and oil, but this year’s soybean production has been reduced due to a drought earlier this year. The drought has reduced soybean production in Argentina by 31%. Argentina has to buy more soybeans from the U.S. to feed its crushers.
Currently, Argentina also seeks to export soybean-related products to China. Gustavo Idigoras, president of the Cámara de la Industria Aceitera de la República Argentina (CIARA), said, “We expect the permission to export soymeal to China will be granted before the end of this year.”