Argentina’s crush utilisation rate at 56% by end 2021/22: Ciara

Argentina’s crushing industry utilisation rate could fall as low as 56% by the end of the 2021/22 production cycle, down from 62% in the 2020/21 cycle and one of the lowest rates in over a decade, according to a new study by local oilseed crushing and exporters chamber Ciara-CEC.

If finally achieved, this utilisation rate would be the second lowest rate in the last decade, coming in only above the 53% registered in 2011/12.

“The oilseeds crushing industry continues to process soybeans with negative margins... The strong demand for bean exports has set the pace of the trend in prices for available goods, with slightly positive margins,” Ciara said in the report.

The report also noted the gradual decline in Argentina's capacity over the last decade, and the rise of neighbouring Brazil. 

“In the last 10 years, soybean production in Argentina has had a drop of 6 million mt, 9%, from 50 to 44 million mt,” the chamber said in the report.

“In the same period, Brazil was the country with the greatest increase in its production, an increase of 69 million tons, or 91%, from 75 to 144 million mt, while soybean production in the US had an increase of 28 million mt, equivalent to 31%, going from 91 to 119 million,” the report said.

“Argentina has lost market opportunities, which have been taken by the United States and Brazil, who were able to supply the increased demand and world trade of soybean and derivative products,” Ciara concluded.

According to Ciara’s monthly monitor, the sector crushed a total of 29.5 million mt of soybeans in the January-August period, marking the third highest volume on record.

In August alone, the crushing sector crushed 3.57 million mt of soybean, up from 3.43 million mt in the same month in 2020, Ciara said.

Argentina is forecast to crush 40.5 million mt of soybeans this year, up 12.5% compared with nearly 36 million mt of soybeans crushed in 2020, according to previous reports.