Uruguay’s Soybean Harvest Drops Big
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We will not exceed 25% of the Soybean harvest we had last year,” Leonardo Olivera, general director of the Agricultural Services of the Ministry of Livestock, Agriculture and Fisheries, said in late May. Regarding the oilseed production volume, the country’s most widespread crop and the one that generates the most foreign currency in the agricultural business, he pointed out that ” last year we reached three million tons, and this year we will surely not reach 750 thousand tons.”
Based on data provided by the consulting firm Blasina y Asociados to El Observador, it was estimated that this year, Uruguay will stop receiving close to US$1.8 billion just because of a drop in Soybean exports due to the drought.
In Soybean, “prices are holding up” and “logistics is being reorganized” in the region since “Argentina is going to lack grain” and “Brazil will have a record harvest,” so the ships go from the northern country to Argentine ports to grind because Soybean meal has “good prices.” This was commented on by the commercial director of Louis Dreyfus Company (LDC) Uruguay, Marcos Uranga, in the Punto de Equilibrio program in Carve.
He said that the waterway is one of the channels planned to transport Brazilian Soybeans and ships from Atlantic ports. “The only issue is that the Argentine ports are armed for export,” so “the unloading takes longer because they have to go to barges and from there to the unloading,” he explained.
According to him, the Soybean production volume in Argentina will be around 25 million tons (Mt). While Paraguay’s Soybean production will be almost 9 Mt, he said.
Uranga also referred to the advance sales made by producers of some 500,000 tons of Soybeans, but there are also other contracts for specific volumes with a price to be fixed, according to LDC data.
“It will be necessary to negotiate case by case based on the financial solvency of the companies, to find a balance point and see how to get out,” said the executive when asked about possible breaches of contracts. With this scenario, he assured that “for about 20 days to a month, there are almost no operations.”
He calculated that the price of Uruguayan Wheat for the new harvest starts with a reference of US$ 265 FOB, which is “historically high.” He indicated that this will affect an increase in the cereal planting area between 5% and 10%, compared to 2022.
The export terminals in Nueva Palmira are the chief loading point for Uruguayan Soybeans, though improvements in port logistics may somewhat increase Montevideo’s share of loadings in the coming years. Currently, Montevideo is chiefly used to top off cargo loading in the Parana River systems, which has lower drafts than Montevideo.
Domestic production of meal and oil is insufficient to meet demand, and Uruguay imports Soybean meal primarily from Argentina and Paraguay and oil from Brazil. Both meal and oil imports have declined since the COUSA crushing facility opened in 2014.
Soybean Trade in Uruguay
According to AgFlow data, Uruguay exported 0.1 million tons of Soybeans to Argentina in July 2023, followed by China (41,916 tons) and Costa Rica (27,200 tons). In 2021, Uruguay exported Soybeans worth $394 million, making it the 9th largest exporter of Soybeans in the world. In the same year, Soybeans was Uruguay’s 6th most exported product. The main destinations of Soybeans exports from Uruguay are China ($187 million), Egypt ($95 million), Turkey ($31.2 million), Bangladesh ($29.8 million), and Brazil ($16.9 million).
In 2021, Uruguay imported Soybeans for $34.1 million, becoming the world’s 48th largest importer of Soybeans. In the same year, Soybeans was Uruguay’s 73rd most imported product. Uruguay imports Soybeans primarily from Argentina ($20.7 million), Paraguay ($11.1 million), Brazil ($2.03 million), the United States ($322k), and China ($1.61k).
Other sources: USDA
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