SAO PAULO — Brazil is poised to supply up to half of the soybeans that Argentina will import after the worst drought in 100 years devastated its fields and cut 2023 output nearly in half, analysts said.
Argentina, which is expected to reap round 25 million tonnes this season, may have to import up to 10 million tonnes of soy, more than double than in previous years, mainly from Paraguay and Brazil, they said.
Brazil is harvesting a record crop and could increase sales to Argentina by at least 10 times, said Sol Arcidiacono, the Rosario-based head of Latam Grains at hEDGEpoint Global Markets.
Brazil will export at least 3 million tonnes to Argentina, but if international soymeal prices pay off, that volume can reach 5 million tonnes, Arcidiacono said, adding that Argentine crushers’ margins are currently negative.
Argentina’s slowest farmer selling in 20 years is also driving imports, Arcidiacono added.
The U.S. Department of Agriculture estimates the Paraguayan 2022/23 harvest at 10 million tonnes. It also expects Argentina to remain the world’s biggest soymeal exporter despite the nation’s soy crop and crushing woes.
Brazil may export up to 97 million tonnes to all destinations on the back of a bumper crop, said Carlos Gogo, a consultant. Some 5 million tonnes may be shipped to Argentina, or more, depending on Chinese demand, he added.
Bolivia and Uruguay will supply soy to Argentina, analysts said.
There are reports of shipments of Brazilian soybeans leaving for Argentina from Porto Murtinho, in the state of Mato Grosso do Sul, and Santarem, in the state of Para, a market source said.
“I understand that the price in Brazil dropped so much with the record harvest, that it became feasible to export (to Argentina) from Northern ports,” the source said.
Agrinvest soybean analyst Eduardo Vanin said if Brazilian soy premiums continued to fall, Brazilian suppliers will remain competitive against their Paraguayan counterparts to sell to Argentina.
Grain companies in Mato Grosso do Sul are estimating a record export of 1.6 million tonnes of soybeans to Argentina via Porto Murtinho and across the dry border to Concepcion, Paraguay, he said.
It is possible that there are shipments from other ports, but the options are limited, Vanin added. (Reporting by Nayara Figueiredo and Ana Mano in Sao Paulo; Editing by Paul Simao)
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