September 13, 2006

 

EU demand for biofuels sparks off demand for Argentinean soy

 

 

Soy farmers in Argentina, the world's top soy oil exporter, are considering expansion to meet demand for biodiesel.

 

Demand for biodiesel is soaring, especially in Europe, where grain use for biofuels are expected to quadruple by 2013.

 

Many expect sown areas to increase significantly from current levels.

 

EU's soaring demand means there's the possibility that production of all Argentina's crops would double, not just soy.

 

Between 20 to 30 percent of that expansion could come from expanding area and the rest from getting higher yields, said Gustavo Grobocopatel, one of the South American country's biggest soybean producers.

 

Soy acreage has grown steadily in Argentina since the 1970s, and production spiked a decade ago with GM seeds that boosted yields.

 

The new soy varieties could also make its way to provinces adjacent to soy-producing provinces, thus increasing overall area for soy.

 

Alberto Rodriguez, director of the Argentine Chamber of Vegetable Oil Processors, said there is still room to increase yields and also to devote more land to soy.

 

Even though most European biodiesel is made from rapeseed oil, Argentine oils were filling the void left in the food market by rapeseed oil being used for biodiesel, Rodriguez said.

 

Argentina is the third-biggest producer and exporter of soybeans after the US and Brazil.

 

However, environmental groups are already campaigning against increased soy plantings in the country. More farmers in Argentina planting the crop may result in food crops increasingly replaced by soy, thus putting the country's food supply at risk. Other foreseeable problems include deforestation and depopulation.