Mar 31, 2023

Argentina May Import As Much As 10 million Tons of Soybeans

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

This year's soybean production in Argentina is going to be the worst in two decades forcing Argentine crushers to import soybeans to meet their commitments for soybean meal and soybean oil. The 2022/23 Argentina soybean crop could be in the range of 25-26 million tons compared to the 43 million tons produced last year. Argentina may import as much as 10 million tons of soybeans in 2023 and Brazil could supply as much as half of Argentina's imports.

Traditionally, the majority of Argentina's soybean imports come from Paraguay. The soybeans are barged down the Parana River to crushers and export facilities near Rosario, Argentina. Since the crushers and exporters are generally one in the same, the soybeans from Paraguay may be crushed or loaded directly onto ocean going vessels.

Brazil produced a record soybean crop in 2022/23, so there are soybeans available for export to Argentina. Normally, Brazil exports approximately 300,000 tons of soybeans to Argentina annually, but that could be as high as 5 million tons or more in 2023 because Paraguay probably will not have enough supply to fill Argentina's needs. Paraguay's 2022/23 soybean production is estimated at 9-10 million tons.

Soybean crushers in Argentina have already booked vessels of Brazilian soybeans from ports on the Amazon River and more are expected. Much of Argentina's soybean imports from Brazil will come from the Port of Murtinho in the state of Mato Grosso do Sul. From the port, the soybeans would be barged down the Paraguay Rive through Paraguay to where the river joins with the Parana River in northern Argentina. From that point, it is a straight shot south to the crushers at Rosario.

Bolivia and Uruguay could also supply smaller volumes of soybeans to Argentina.

Additionally, farmers in Argentina are expected to be very slow sellers of their soybeans while they wait for improved prices or another "soybean dollar" program where they can sell their soybeans at a preferred exchange rate which would be significantly above the official rate. Inflation in Argentina is approximately 100%, so farmers want to hold onto their grain as long as possible as a hedge against inflation. This slow selling by the farmers could also drive imports.