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By Maximilian Heath
BUENOS AIRES, April 4 (Reuters) – Argentina is set to lose its status as the world’s top exporter of processed soy meal due to the toll of historic drought on the country’s main cash crop, a major exchange said on Tuesday.
The Rosario stock exchange (BCR) predicted in a report that Argentina’s soy meal shipments will likely be overtaken by neighbor Brazil for the first time in a quarter century during the current harvest. The 2022/2023 national soy meal output is expected to plummet 36% from the previous season to total just 27 million tonnes.
BCR estimates that some 20 million tonnes of soy meal will likely be exported, and still represent around 29% of global supply. The exchange forecast that Brazilian soy meal shipments will likely reach between 21-23 million tonnes.
Data from Brazil’s industrial vegetable oil association Abiove, however, puts this year’s expected soy meal sales slightly lower at 20.7 million tonnes.
Argentina’s reduced soy meal yield will leave the country, for decades a global farming powerhouse, with its lowest level of production since the late 1990s.
Protein-rich soy meal is mostly used to make livestock feed, but it is also a key ingredient in a variety of foods and beverages like tofu and soy milk.
Also a major corn and wheat supplier, Argentina has dominated the soy meal market in recent decades thanks to a massive local soybean crushing industry located near both major farmland and the mighty Parana River, South America’s second longest waterway, which provides easy access for ships.
Severe drought conditions from last May through early March significantly shrunk the soy crop.
Crushing chamber CIARA-CEC has said local soy processing plants have been operating at record low levels capacity as a consequence of the drought.
During the previous 2021/2022 cycle, declared soy meal shipments reached 23.5 million tonnes, which was down 13% compared to the year-ago period, according to government data.
(Reporting by Maximilian Heath Editing by Marguerita Choy)
((david.aliregarcia@thomsonreuters.com; +52 55 5282 7151; Reuters Messaging: david.aliregarcia.thomsonreuters.com@reuters.net))
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