Drought hit Argentina turns to US for soyabeans

Drought hit Argentina has turned to the US for soyabeans, booking the largest amount since 1997 in order to make up for the expected shortfall later this year.

The US Department of Agriculture said that 240,000 tonnes of soyabeans were sold to the Latin American nation over the past two days for delivery during the 2018-19 marketing season, which starts in September.

Argentina is the world’s third largest soyabean producer after the US and Brazil, and processes the bulk of its crop, selling soyabean meal and oil on the international market. The country is the top exporter of the two soyabean products.

“It’s a significant event,” said Andy Allan, analyst at agricultural commodity pricing agency AgriCensus. He said the soyabean crushing operators were looking to buy 1m tonnes this week for loadings in October and November.

In 1997, Argentina bought 474,000 tonnes of soyabeans from the US.

The severe drought has led to forecasters sharply reducing their estimates for the Argentine crop, and the USDA downgraded its forecasts for Argentina’s soyabean production from 47m tonnes to 40m, the lowest level since 2008-09 when the Latin American country’s output totalled 32m tonnes.