May 28, 2008

Global 2007-08 soy stocks to expand thanks to Argentina's strikes

Global season-ending 2007/08 soy stocks will be significantly higher than expected, thanks to the extended farm strikes in Argentina, oilseeds analysts Oil World said on Tuesday (May 23, 2008).

Oil World now estimates global 2007/08 season ending soy stocks on Aug 31, 2008, at 59.18 million tonnes, up from its previous estimate of 56.44 million tonnes but still down from the 72.09 million tonnes at the end of 2006/07.

Argentine farmers have staged two strikes since March over higher soy export taxes imposed by the government. By blockading roads leading to critical ports, farmers have choked off exports, causing exporters to recently declare force majeure over contracts.   Negotiations between the government and farm groups have so far failed to yield results.

This effectively meant that in the crop year 2007/08 world soy stocks would not decline as sharply as previously expected, Oil World said.

The reduced marketing of soy in Argentina and the sharply lower than expected Argentine soy crushings and exports will result in considerably higher than expected stocks as of end-Aug 2009, it added.

Oil World also adjusted its estimates for global soy crushings  down by 1.5 percent or 3 million tonnes to 206.39 million  tonnes for 2007-08 due to the Argentinean strikes.