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Argentina's farmers grow and export less soybeans

Drought, taxes and COVID-19 coronavirus remain as obstacles.

PORTO ALEGRE, Brazil -- The Buenos Aires Cereal Exchange updated its estimates for both corn and soybean production in Argentina.

For the second year in a row, the South American country will produce more corn than soybeans, due to drought and lower taxes for the cereal compared to soy. The estimate forecasts an output of the coarse grain of 50 million metric tons, while the production of the oilseed would be 49.5 million metric tons - 10% less than last year. A similar situation was seen during a drought in the 1997/98 season.

In its previous report, the USDA had an estimate of 50 million metric tons for corn and 54 million metric tons of soybeans, but probably the agency did not consider the recent lack of rains.

The newest concerns for Argentinian farmers is the lack of grain quality. The relief, on the other hand, is that exports started to flow normally. As the country entered a full quarantine, some mayors had blocked exits of some municipalities and rural roads, 

According to the Center of Cereal Exporters, 75% of the loadings in the Port of Rosario, in the Santa Fe province, are under normal schedule. In the port of Quequen, 90% are being delivered on time.

“The USDA tends to cut projections little by little. I see that they cut Argengtina's soybean output by 2.0 mmt in its latest projection,” said Pablo Fraga, market analyst at Roagro brokerage.

The Buenos Aires Cereal Exchange also reported that each region in the country has very different yields in comparison, but with a standard of more losses on soybean fields than corn fields.

More and more taxes, fees

In the municipality of Arroyo Seco, province of Santa Fe, an Archer Daniel Midland port had an increase of 100% for the Port Organization Fee imposed to fight the Covid-19 crisis. Transport organizations already protested against the measure, not discarding a strike. 

Less exports

After the farmer’s strikes due to the increase in export taxes, an annual drop of grain export of 6.9% was seen in March by value. Grain and cereal exports reached $1.06 billion in the period, according to data from the Center of Cereal Exporters. All the measures regarding the coronavirus are believed to have taken an effect on shipments. Considering January, February and April, exports dropped 16.6%.

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