Argentina's soyoil prices tumble on logistics woes, subdued demand

Prices of Argentine soyoil have tumbled to levels not seen since 2006 as demand for the soft oil has evaporated due to lockdowns in large importers and local logistical issues that have caused a build-up of tanker vessels in the Parana hub.

Soyoil prices in the world’s largest exporter have fallen 30% since the start of the year to $557.25/FOB Up River as edible oil and biodiesel demand plunged due to the Covid-19 pandemic.

“It's like the hell is the limit, every time new records are being broken and there are still no buyers around. That drop should have brought someone in, but no single buyer heard, amazing,” an Argentine broker told Agricensus.

India and Bangladesh, Argentina’s largest customers, have been under lockdown since late March to curb the spread of the virus, cutting demand.

At the same time, a plunge in crude oil prices has reduced demand from the global biofuel industry.

On top of that, Argentina has been plagued by low water levels on the Parana River, which connects the Rosario export complex to global markets.

The hub handled 93% of all Argentina's vegoil exports in 2019, further damaging the limited demand that there was.

Water levels are near lows last seen in the early 1970s, delaying load times and forcing sellers to top up vessels at Brazil’s Paranagua hub to build full cargoes.

Quarantine measures have added to delays, as Argentina has also upped its sanitary requirements for tanker crews as it aims to limit the spread of the virus.

“There is a clustering of vessels in May as many are coming in from April due to low levels of water in the river and sanitary measures for crew members of the vessels, which is taking more time to load,” a second Argentine broker said.