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Soybean Processing in Argentina Expected to Surpass Record Levels in Next Two Years

Analysts are expecting soybean processors in Argentina to increase output to an all-time high within the next two years.

For years, Argentina’s processors could not secure enough soybeans to meet demand, however, the industry over-expanded, investing $3 billion to increase capacity, while economic restrictions placed on the industry through government policies under former president Christine Fernandez de Kirchner led to more than a third of the sector’s capacity being left idle last year.

But reforms enacted by newly elected President, Mauricio Macri are re-positioning the country’s processing sector to regain its market dominance.

The devaluation of the currency, climbing global demand, and hoarded crops worth $10 billion available for processing, have left Argentina’s processors holding the advantage. “New policies are sending farmers and exporters to a perfect world,” Ramiro Farias, economist with Argentina’s Cordoba Grain Exchange told Bloomberg.

New trade policies are leading analysts to estimate that processing may climb by 8% in 2016 to 42 million tons, and increase another 10% in 2017, according to Farias.

Carlos Blosom, General Manager of Buenos Aires-based soybean grower Cresud Sacifya, who manages 568,000 acres of land across Argentina, Brazil, Bolivia, and Paraguay, told Bloomberg, “In the short term, local farmers will complain for the competition, but in the long term, when the industry achieves better profits and is able to pay more to local farmers, they will benefit.”

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Lynda Kiernan is Editor with HighQuest Group Media and of the Oilseed & Grain News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@highquestgroup.com.

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