The Rosario Stock Exchange projected that Argentina could increase soybean exports to China in the 2018/19 campaign.
According to data of the entity, with a production of soy that would reach 50 million tons, shipments of the beans would total 14 million tons, doubling the value of last year. And the rest, between 36 and 38 million tons, would go to the factories located in Gran Rosario, the world's leading agro-export hub, to be processed as flour or oil.
Mainly, occurs as a result of the attractive price of the beans for the commercial war between the United States and China it's him no stimulus to process that part as a by-product since from February 2019 all products of the soybean complex will have the same retentions (23%) and will gradually fall to 18% in December. Previously, before the changes introduced by Macri in August, there was a 3% differential to encourage the sector.
In addition, the previous week, China returned to buy soybeans from the United States after the 90-day truce agreed at the G20 summit in Argentina. This was confirmed by the same US President, Donald Trump, who said that China is buying "huge amounts" of US soy. According to Reuters, at least 500,000 tonnes have been reported, but say they could reach 2 million tonnes.
Faced with this new context, the Directorate of Economic Studies of the same entity Rosário highlighted Clarín Rural "is a first gesture. In order to consolidate and reduce trade tensions, the soybean market would tend to normalize"Thus, as they explained, each of the actors would return to the previous schemes of trade war and Argentina would be exporting smaller quantities prioritizing its own oil industry to produce more flour and oil.
In any case, in addition to this approach, the price differential still persists. On Friday, the theoretical FAS for export was US $ 242.9 per ton and the theoretical FAS for the sector was US $ 227.1 (US $ 8,597) per ton.
It should be noted that Soybean meal is the main export product to Argentina. According to INDEC data, in 2017 30.3 million tons were shipped abroad and reached US $ 9.3 billion. And soybean oil (including both refined and raw) ranked third on the export podium last year, with 4.9 million tonnes generating foreign exchange for $ 3,725 million.
This year surely these numbers fall because only 32 million tons of oilseed were produced by the strong drought which suffered the wet pampas in the middle of summer. And at the moment, the companies had to import 5 million tons of soy to fulfill the commitments assumed.
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 grain in the world. With the 25% tariff imposed by the Asian giant on Yankee exports, the values of American soybeans fell.
In consequence, the US country is processing more soy than usual by generating more competition in flours and oils around the world.