The world of soybean shipping has turned upside down thanks to the ongoing U.S.-China trade war. Argentina, the No. 3 global soy grower, is making major purchases of U.S. supplies. A weekly measure of US shipments to Argentina just rose to the highest in at least 35 years, U.S. government data showed Tuesday.
With China shunning U.S. supplies, the Asian country is soaking up oilseeds from everywhere else. Argentina usually processes its beans at home before sending soy meal and oil abroad. Now, enticed by China’s voracious appetite and a changed domestic tax structure, the country is shipping more raw soy, with some analysts predicting exports could quadruple.
In order to feed its domestic soy-crushing industry, Argentina is increasingly turning to imports, especially after a drought earlier this year hurt crops. Meanwhile, U.S. oilseed supplies have gotten relatively cheap. With China out of the market, demand for US beans has turned lackluster at a time when harvests are booming, signaling a surge in inventories. That’s good news for Argentine buyers.
In the week ended 8 November, 249,278 metric tons of U.S. soybeans that are earmarked for Argentina were inspected and weighed for export. That’s the highest since the U.S. Department of Agriculture data begins in 1983. For the 2018-2019 season, Argentina-bound soy is close to 1 million tons, compared with none for the previous year.