Argentina’s soy crush hit 19-year low in 2023

The dire harvest meant soy crush volumes were so low that Brazil knocked the country off its customary spot as the world’s top soy oil and meal exporter

Argentine soy processors crushed the lowest volume of beans in 19 years in 2023, as record bean imports failed to compensate for a dismal harvest ruined by drought, the Rosario Board of Trade reported on Monday

Last year’s crush volume was just 27 million tonnes, down from 38 million in 2022, according to the board’s estimates. To make up for the paltry volumes coming in from Argentina’s parched fields, far more soybeans were imported: 10.4 million tonnes, the highest on record, compared with 3.3 million tonnes in 2022. 

Soy crushing is the process by which soybeans are turned into oil and meal. Argentina, the world’s largest exporter of soybean oil and meal, was knocked off its throne by Brazil in 2023 as a product of the drought.

Just over half of 2023’s bean imports (5.8 million tonnes) came from Paraguay. However, Brazil, which is not usually a major supplier, shipped 4.1 million tonnes to Argentina after a plentiful harvest.

These foreign beans meant that, while the harvest itself was down by just over 56%, the soy crush was down by just under 30%. 

Nonetheless, the shortage meant that a record 54% of crush capacity sat idle in 2023, the board’s analysts found.

For the 2023/24 harvest, the board noted that the abundant rainfall brought by the El Niño phenomenon has replenished soil moisture, giving the industry grounds to be optimistic that production will recover. 

Soy export duties

Meanwhile, analysts warn that the proposed increase in export duties on soy meal and oil discourages processing and could have knock-on effects for growers. The latest draft of Milei’s “omnibus bill” proposes to increase meal and oil export duties from 31% to 33%, putting them on the same footing as bean exports.

According to analysis by Pablo Andreani and Associates quoted in a report by the Argentine oil industry chamber CIARA and the Grains Exporters’ Center, increased duties would increase production costs for processors by around US$6.6 per tonne. If the harvest clocked in at 40 million tonnes, producers could end up receiving US$264 million per year less in payments, the analysts noted. 

“Several economic, financial, and tax studies have shown the negative impact and the increase in production costs for soy oil and meal when the 2% differential is eliminated between the products and sub-products from processing,” Andreani wrote, adding that it could mean farmers plant fewer hectares of soya and use less technology in the 2024/25 season.


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