Argentine soymeal plants hit by massive cut in beans supplies, export chamber says

26 March 20

Soybean deliveries to crushing plants have been severely cut in Argentina, the world’s top supplier of soymeal livestock feed, as the country reacts to the coronavirus pandemic, the local grains export industry chamber said on Tuesday.

More than 70 municipalities throughout the country are enforcing anti-coronavirus measures by controlling the movement of farm produce through their jurisdictions, according to data provided by the CIARA-CEC export chamber, which represents global companies including Bunge and Dreyfus.

There has a been a “strong reduction” in truck deliveries of raw soybeans to the giant crushing plants that dot the banks of the Parana River, Argentina’s grains superhighway, Gustavo Idigoras, head of the chamber, told Reuters in a text.

Thanks to its highly fertile Pampas grains belt, processed and unprocessed farm products are Argentina’s main source of export dollars at a time when the government is struggling to end the country’s recession and avoid a sovereign bond default.

Chicago Board of Trade soybean futures closed slightly higher on Tuesday, propped up by worries that the coronavirus outbreak would slow shipments of soy from Brazil and Argentina.

In China, many crushers have already suspended operations because of a soybean shortage, as coronavirus outbreaks in South America have disrupted exports of the oilseed.

The pandemic has struck at the worst possible time for the South American country’s all-important farm sector, as growers just start harvesting this season’s soybeans, Argentina’s main cash crop.

As of Tuesday, Argentina had reported six deaths caused by the virus and 387 confirmed cases.

While Argentina’s river ports are functioning, crushing workers are subject to strict, state-mandated safety precautions aimed at slowing the spread of the virus.

However, the main problem lies closer to the farm, where trucks are being slowed by the precautions as they seek to pick up soybeans for delivery at crushing plants.

“All plants are getting about half the trucks that they usually get at this time of year,” said a high-ranking Buenos Aires-based oilseeds trader, who asked not to be named due to the sensitivity of the situation.

“If a stevedore, or grains inspector or crushing worker gets a confirmed case of coronavirus, the slowdown in crushing will quickly get worse,” said the source, who works for a major international grains company.

The key Parana port town of Timbues blocked trucks from entering on Friday to stop the spread of coronavirus. Timbues is one of three main towns that make up Argentina’s main grains export hub of Rosario.

Argentine growers are expected to harvest 51.5 million tonnes of soy this year, according to the Rosario grains exchange.

Source: Reuters