Argentina’s Soy Complex Exports to Surge, Reaching $18 bn in 2024

Nov, 14, 2023 Posted by Gabriel Malheiros

Week 202343

The Rosario Stock Exchange (BCR) forecasts that Argentina’s net export revenue from the soy complex will reach $18 billion in 2024, marking a 125% increase compared to this year.

The surge in projected revenue is attributed to a 150% production increase, rising from 20 million tonnes in the drought-stricken 2021/22 season to 50 million tonnes, as per forecasts from both BCR and the Buenos Aires Grain Exchange (BCBA).

“October became a decisive month for Argentine crops. Long-awaited rains helped restore soil moisture profiles in key regions, although even more millimeters of rain are still needed west of Buenos Aires and in the north-central region of Córdoba,” stated the exchange’s report.

Combined with the largest planted area in six years, spanning 17.4 million hectares, “this allows us to project soybean production of 50 million tonnes; that is two and a half times the amount obtained in the previous cycle,” explained the exchange’s report.

Considering the remainder of the 2022/23 season, the total soy supply in Argentina is estimated at 58 million tonnes, in line with the average of the last ten seasons and 54% higher than in 2022/23.

“With this, it can be predicted that the processing by the oil industry would increase to 39 million tons, an increase of nearly 50% compared to the previous cycle,” said the exchange.

Considering the output volume output and processing rates for the current cycle, “net exports of the soy complex are estimated at only $8 billion, the lowest value in almost 20 years, since the 2003/04 season. Meanwhile, for the new 2023/24 season, and due to the production recovery, a dollar entry is projected for net soybean and derivative product exports of $8 billion.”

Considering climatic conditions, there would be an additional influx of around $10 billion compared to the previous campaign and above the average of the last five years, although still below the 2020/21 and 2021/22 values.

Soy Complex: Its Significance for Argentina

In Argentina, 30% of export dollars originate from the agro-complex. Therefore, the revival of this industry, crucial for Argentine foreign trade, is anticipated as a boon, as stated in the Rosario Stock Exchange’s study.

The report also added that “most of the revenue from foreign sales historically occurs in the first two quarters of the market year, representing an average of 61% of the export value.” Hence, “we could expect a normalization in foreign trade volumes from April next year.”

As for the planting progress, the Buenos Aires Grain Exchange indicated that, so far, an area 8.75% larger than the 2022/23 season has been planted, as “the oilseed receives 400,000 hectares from the area designated for early corn that was set aside due to a lack of rain.”

Source: Ámbito

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