Soybean stocks in Argentina are running out

After a catastrophically low soybean harvest, Argentina’s processing industry lacks the raw materials to maintain production.

The small harvest is creating serious problems for Argentina’s crushing industry. The low level of domestic supply of raw materials leads to a significant decrease in the utilization of oil mills. Currently, the available capacity is only two-thirds utilized. The utilization rate may further decline amid a decline in domestic soybean supplies. The first batches of the new harvest will be available to the industry only in May 2024.

Compared to the same period last year, soybean processing in January-August 2023 decreased by 27% to 19.6 mln tonnes. The last time so little was processed was in 2015. To fulfill their supply obligations, the plants depended on imports. Thus, in the period from January to August 2023, about 8.2 million tons were imported, which is more than ever during this period. For the whole of 2023, this figure could reach 10 million tons.

According to the Buenos Aires Grain Exchange, after a disastrous soybean harvest in 2023, production is likely to return to its previous size next season. Exchange analysts predict that the 2024 harvest, which will begin in March next year, will be about 50 million tons, which is significantly more than in 2023, when only about 21 million tons of soybeans could be harvested from the fields. The U.S. Department of Agriculture (USDA) is a bit more cautious and expects the harvest to reach 48 million tons next year.

Tags: stocks, Argentina, soybean