April 12, 2007

 

Argentina sells first soybeans of 2006/07 season at auction

 

 

Argentina's 2006/07 soy trading season kicked off Wednesday (Apr 11), with local broker Convencer paying 1,500 pesos (US$485.44) per tonne to own the first soy of the season.

 

The sale price was nearly three times the 591 pesos being asked for old-crop soybeans at the Rosario Grain Exchange on Wednesday (Apr 11).

 

The soy was grown in the northern province of Chaco, where recent technological advances have allowed soy cultivation to spread.

 

The soy sale was preceded by speeches by exchange president Jorge Weskamp and Santa Fe Province Governor Jorge Obeid, who pointed out the stunning growth in soy production and processing in the province over the past few years.

 

With demand for biofuels spurring increased production, Obeid highlighted the key role that soy will play in the province's future.

 

"The soymeal we produce will feed the world, and the oil from soy and other crops will form the base for the development of biodiesel," Obeid said.

 

"There is no conflict between producing biofuels and food," he added.

 

Argentina is counting on new technology to boost output and area in which cultivation is possible.

 

"Biotechnology is the main source of solutions to increase productivity and quality, expand the agricultural frontier and at the same time meet demand," Weskamp said.

 

Argentina is the word's leading exporter of soymeal and soyoil and the third largest exporter of soybeans following the US and Brazil.

 

Crushing capacity in Argentina has expanded sharply over the past five years with processing and shipping concentrated on the banks of the Parana River near Rosario.

 

Over 90 percent of the soy products shipped from Argentina each year flow through Rosario's ports.

 

However, despite the optimism, there are concerns that government intervention in agricultural markets will limit production expansion.

 

"Certain forms of government intervention in markets may limit development," Weskamp said.

 

Decreased beef production and expectations of sharply less wheat planting in the 2007/08 season are examples of the unintended consequences of the intervention, he said.