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Argentina drought, river woes push soy crushers into losses - chamber

By Maximilian Heath

BUENOS AIRES, Jan 12 (Reuters) - Argentina's soybean crushing industry closed 2021 with idle capacity of 50% and negative margins due to drought and low water levels in the Parana River which are pushing up transportation costs, a sector chamber said on Wednesday.

The CIARA oilseeds industry chamber said in a monthly report that low sales from farmers had hit crushing production in the world's top exporter of processed soybean oil and meal, which is crushed in huge mills alongside the Parana waterway.

"With the volume of soybean milling in December (2.9 million tonnes) there was a new increase in the idle capacity of the industry, now reaching almost 50%," the chamber said. The country has seen idle capacity reach up to 60% in recent years.

The Parana River has dropped to a recent record low level at inland grains port hub Rosario, which Reuters reported this week, forcing cargo ships to load 30% less grains than normal. Dry weather is also likely to hit harvests.

"The return of the Parana River decline is causing an increase in export costs; all these variables together led to the return of negative milling margins," CIARA said.

Argentina's government said earlier on Wednesday that local farmers were lagging behind in soy sales versus the previous harvest season. In total, the mills have bought 29.3 million tonnes of soy from the 2020/21 cycle.

Argentine farmers are now sowing soy for the 2021/22 cycle. (Reporting by Maximilian Heath; editing by Jonathan Oatis)

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