Soy boon for Argentina as Ukraine war boosts prices
Russia’s war on Ukraine has sent grain prices skyrocketing, a worry for consumers worldwide but potentially a boon for producers like Argentina, which hopes an influx of soybean “agridollars” will boost its faltering economy.
South America’s third-largest economy is the biggest exporter of soybean meal and oil in the world, and only the United States and Brazil export more soybean grains.
Soy represents nearly a third of Argentina’s exports and in 2021 contributed $9 billion to the state coffers.
This year, the sector is expecting record sales of $23.7 billion - about $700 million more than in 2021 - despite a 10 percent smaller harvest due to severe drought.
The harvest season is at its height, and workers are laboring from dawn to dusk to clear the fields before the autumn rains arrive.
In the past, the grain has been a savior for inflation-troubled Argentina.
A soybean boom in the 2000s is widely considered to have helped the country recover from its worst economic crisis in 2001.
In the last 40 years, the planted surface area of soy has multiplied 14 times.
Argentina is also a major producer of sunflower oil and wheat --other grains affected by the ongoing war.
After a record sunflower harvest of 3.4 million tonnes in 2021-2022, the area under cultivation is set to increase by 17 percent this season to two million hectares.
The country also had a record wheat harvest this season.
Estimates are that in 2022, Argentina’s agroindustrial exports will bring in a record $41 billion -- about $3 billion more than in 2021.
But some point out that Argentina could have reaped an even larger benefit if it weren’t for rising input costs.
Argentina imports about 60 percent of the fertilizers needed to grow food - around 15 percent of it from Russia - but supplies are now short and prices climbing, meaning lower yields.
Higher fuel prices are also taking a toll, set against the backdrop of soaring consumer inflation of around 60 percent projected this year for Argentina.