Meanwhile, in this panorama that seems, at least, auspicious, warning lights come on. It is that in the first quarter of the year the primarization of agricultural shipments grew, that is, more unprocessed grain was exported than products with added value.
Specifically, according to the official registry of the Ministry of Agriculture of the Nation, in the January-March period, Argentina exported a total of just over 15.6 million tons of grains, while in the same period of the previous year shipments reached the 11.3 million tons. Thus showing a growth of 38%.
On the other hand, with regard to exports of products with added value, shipments of soy oil reached 1 million tons, when in the first quarter of the previous year they had added 1.7 million tons, which marks a decline of more than 40%.
Along the same lines, exports of by-products (mainly soy flour and expeller) in the first three months of the year accumulated 6.1 million tons, which represents a drop of 19.7%, because in March of last year they accumulated 7.6 million tons.
As explained by the agro-industrial sector, at this time the idle capacity of the sector is well over 50% and that is not good news for Argentina. It is that, the industry of local crushing is one of the most important in the world and is even consolidated as a leader in shipments of soybean oil and by-products.
Taking this scenario into account, the war between Russia and Ukraine caused an exponential rise in agricultural commodities and, except for one moment during the last days of March, when the grinding margins turned out to be slightly positive for the April position (between 2 and 5 dollars per ton of profit and for a few days) as a result of a conjunctural drop in the price of spot or available soybeans, in the rest of the May and June positions, the crushing margins continued to be negative. Since the beginning of the 2022 calendar year, soybean crushing margins have not been able to leave the negative margin range, causing real losses to the oil industry throughout this period.”
The industry alleges that from the increase in withholdings on soybean by-products to form a trust that seeks to compensate for domestic wheat prices, the crushing of oilseeds is experiencing a clear setback in profitability that is already being noted in the priority of shipments.
The truth is that the end of the film will be seen in the coming months because there is still a long way to go and the high prices shown by agricultural by-products might be an incentive to increase milling in the coming weeks. In any case, the picture seems to be more than encouraging when it comes to foreign exchange earnings.
