August 21, 2006

 

Argentine soy crushers see bright future in exports

 

 

Argentina's soy crushers look set to export their way out of the doldrums as a record soy harvest, profitable margins and recent investments breathe life again into a once lackluster market.

 

To the glee of Argentine exporters, export shipments out of rival Brazil are down almost 2 million tonnes from 2004/05 as Brazil's crushers experience difficulties in securing supplies. 

 

Argentine soy meal exports for 2005/06 are expected to rise by 20 percent compared to last year to 24.6 million tonnes.

 

For 2006/07, growth is expected to be more tempered at 5 percent.

 

Meanwhile, Argentine soy oil exports this year are also likely to expand by 17 percent to 5.55 million tonnes and by 6 percent in 2006/07 to 5.9 million tonnes.

 

Processors in Argentina may use up to 33.0 million tonnes of soy, up from the previous forecast of 31.5 million in 2005/06.

 

Still, demand by local crushers is siphoning off what could have been exported as exports have remained at the same levels despite a larger harvest this year.

 

For 2006/07, a lack of available soy supplies is expected to limit exports to 7.8 million tonnes, down from the previous forecast of 9.25 million tonnes.

 

Soy crushing in the EU is expected to slow due to lower supplies from exporting countries.

 

Soy crush for the EU-25 for 2006/07 was one-third lower than 2001/02.

 

However, supplies of soy meal, particularly from Argentina, should be plentiful.

 

In the EU-25, soymeal imports would increasingly replace soy imports, where 2006/07 imports are expected to hit a record-high 22.8 million tons.

 

The same applies for processing countries such as Japan, Taiwan, and Mexico. Similarly, soy oil imports by the EU-25 are also expected to grow due to higher consumption.

 

In China, domestic soy processors are still sated with large shipments imported in June as demand for soy oil imports in the country slows due to rising international prices.

 

USDA trimmed its forecasts of soy oil imports for China to 1.75 million tonnes in 2005/06 and 1.9 million for 2006/07.

 

China's soy crop for this year was expected to be slightly lower this year as smaller areas are cultivated due to lower prices offered last year, a development which may present opportunities for Argentine exports.