How South America's market compensates for the lack of oil crops - Aboissa Commodity Brokers




In the current season, the countries of South America faced three key challenges - the weather, economic recession, and internal political problems. Laura Pereira, manager of work with key clients in the oil sector of the company Aboissa Commodity Brokers, told about this during her speech at the international conference "VegOilTrade-2023" in Rotterdam.

Due to extremely unfavorable weather conditions in Argentina, the soybean harvest was significantly affected in 2022/23 MY and is estimated by the Buenos Aires Grain Exchange at the level of 22.5 million tonnes. This is 20.8 million tonnes less than the result of the previous MY.
In addition, the challenge for the country was the high level of inflation (104% as of May of this year) and the shortage of US dollar reserves, which exacerbates the instability of the Argentine economy.
Shortage of its own soybeans production, Argentina must increase imports, in particular from Paraguay. In 2022, Argentina's share in the import of Paraguayan oilseeds was 75%.
"The lack of the soybean harvest in Argentina is not a big problem because thanks to close ties with other countries, Argentina has the opportunity to quickly fill the shortage in the oilseeds industry," the speaker said.
In Brazil, were observed other challenges  - low prices on the domestic market, regulatory changes in the biodiesel segment, and weakening of the Chinese demand.
In general, the agricultural market of South America is interesting because has a wide range of crops it grows, sufficient irrigation, and countries can compensate each other.  The decline in the production of agricultural crops is uneven - a high harvest of crops in some countries can compensate for its reduction in others.