“Lost Decade”: The major dollar-generating industry is in its worst moment

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Soybean processors for the production of export by-products are in a critical situation, losing positions in international markets and sustaining growing spare capacity. The reality is worrying since it is the industry that contributes the largest amount of foreign currency to the country, in an economy in need of dollars.

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According to the Chamber of Petroleum Industry of the Argentine Republic and Grain Exporters (CIARA-CEC), For the first time in 30 years, Argentina will lose its top spot as an exporter of soybean meal at the hands of Brazil who would have occupied it for the first time in history. In addition, its participation in international oil and oilseed meal trade in 2022 was the lowest since 1998. For its part, Argentina’s contribution to soybean milling within Mercosur countries has plummeted. AND the year ended with a 10% drop in bean processing.

THE laziness of soybean milling plants continues to grow. In February it increased by 6 percent compared to the previous month and thus achieved the second largest brand in historyarriving at a 74 percent. This collapse in the utilization of installed capacity, which went from 32 percent in January to 26 percent in February, is “the worst record in recent years”, the industrialists assure. At 1,554 million tonnes processed, February recorded its lowest figure in 13 years. As reported by CIARA, in the first two months of 2023 milling reached 3,439 tons, while the worst historical record was 2,921 tons in 2013.

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“In the last ten years, while the milling capacity in Argentina has decreased by 1,760 tons per day, now reaching 204,671 per year, in Brazil it has increased by 64,382 per day, reaching 202,337; in a decade it almost equals the milling capacity of Argentina,” noted the exporters.

The stagnation of agricultural production in recent years, aggravated by this season’s drought, will lead to 2022-2023 soybean milling drops to 28 million tons, lowest volume since 2004.

This lean soybean crop will result in lower flour and oil production, and this, in turn, will result in lower foreign exchange earnings. In fact, declining bean supply has already had an impact first-quarter dollar income dropped to $1,228 million, lowest since 2006.

In March, for example, due to the drought, companies in the sector liquidated $1,228.6 million, the second lowest March since 2020, although 90% higher than in February 2023. Only 11,420 truckloads of soybeans entered industrial plants in the third month of the year, the lowest number since 2021.

With these data, the House does not hesitate to say yes “The Lost Decade” for the soybean processing industry.

Source: Clarin

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