Argentina suspends export registration of soybean oil and flour

A truck driver drives past a soybean plantation affected by a long drought that finally ended this month with the arrival of rain, at a farm in 25 de Mayo, on the outskirts of Buenos Aires, Argentina on January 24 2022. REUTERS/Agustin Marcarian

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BUENOS AIRES, March 14 (Reuters) – Argentina has suspended registration of export sales of soybean oil and meal, the South American government said in a statement on Sunday, prompting swift condemnation from the government. industry of the world’s leading exporter of processed soybean products.

This decision stops sales and exports of the 2021/22 harvest, but physical shipments have not started as no harvest has taken place. The move by Argentina, the world’s largest exporter of soybean meal and oil, is likely to upend the global soybean market, which saw prices soar during Russia’s invasion of Ukraine.

U.S. soybean meal futures jumped more than 2.2% following the news, while soybean oil futures fell 1.26%.

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Argentina’s average monthly exports amounted to 1.5 million tonnes of flour and 300,000 tonnes of soybean oil in 2021, according to shipping agency NABSA.

The country is expected to account for 41% of global soybean meal exports and 48% of global soybean oil exports in the 2021-22 crop year, according to the US Department of Agriculture.

The undersecretary for agricultural markets said in a statement that export registrations for soybean oil, soybean meal and other related products would be halted immediately, a move ahead of the 2021/22 harvest which will begin in a few weeks. About 5 million tonnes of soybean oil and other soybean by-products from the 2021/22 crop year have so far been officially registered for export, according to government data.

The local CIARA Chamber of Oilseed Processors and Exporters, which represents the industry, said the government had closed export registration because the chamber said the government wanted to raise tariffs “by two points” on exports.

“This is completely against Argentina’s export interests,” Chamber said on Twitter. “Besides being illegal, it will affect foreign exchange earnings and employment in the agro-industrial chain.”

The government statement makes no mention of export tariffs, although these have long been a point of tension with farmers and exporters. The government, struggling with high debts, needs the dollar revenue and tax receipts from sales of soybeans, Argentina’s main export.

Argentinian exports of soybean oil and flour are currently taxed at 31%. The country’s 2021/22 soybean crop is estimated at 40-42 million tonnes, although it was hit hard by drought earlier in the year.

Soybean traders said the sudden halt in supplies from Argentina will direct importers to the United States and Brazil for replacement supplies.

“Buyers have no choice but to reduce consumption or switch to other sources of supply,” said a Singapore-based trader.

“We expect higher demand for US flours. In Southeast Asia, buyers such as Indonesia, Malaysia and Thailand relied heavily on Argentinian flours.

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Reporting by Jorge Iorio and Eliana Raszewski; Additional reporting by Gavin Maguire and Naveen Thukral; Editing by Adam Jourdan, Cynthia Osterman and Kenneth Maxwell

Our standards: The Thomson Reuters Trust Principles.

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