BUENOS AIRES: Argentina could export up to 25 percent fewer soybeans this year than last, analysts said, after severe rains left many fields underwater, damaging oilseed quality.
In April, floods inundated key farm areas of Argentina, the world's third-biggest exporter of raw soybeans, prompting the US Department of Agriculture to slash its forecast for soybean output to 56.5 million tonnes this year.
The USDA maintained its export forecast of 11.4 million tonnes, however, despite skepticism from market watchers.
"Argentina will not be able to fulfill its bean export projections," said Sebastian Gavalda, president of consultancy Globaltecnos, which sees Argentine exports of just 8.5 million tonnes of soy for the 2015/2016 season.
Damaged soybeans from the affected region, which, according to the government, has already lost 6 million tonnes of output, do not meet quality standards for export.
The low quality beans would have to be sent to mills to be mixed with quality soybeans. However, mixing could degrade the quality of the soymeal by decreasing protein content.
"The problems are going to be fewer exports and some quality issues for oils and other soybean derivatives," said Gustavo Lopez, director of Agritrend, a consultancy.
He expects Argentina to export between 8.5 million and 9 million tonnes this season, down from 11.5 million tonnes in the 2014/2015 season.
Lopez also sees local mills processing between 42 million and 43 million tonnes of soybeans for export as oil and flour during the current season, slightly below the 43.5 million reached last season.
The South American oilseeds powerhouse is the world's top exporter of soymeal livestock feed and soyoil, used in cooking and to make biofuels.
"Standard quality oilseed will be worth a lot, because the industry will need good soy to mix with the damaged oilseed.
That will create the fiercest competition between industry and exporters that we have seen in recent years," said Pablo Adreani, director of consultancy Agripac.
The floods, which set the harvest back by three weeks, hit large areas of Cordoba, Santa Fe and Entre Rios, the country's three top farming provinces after Buenos Aires province, whose crops were not affected by flooding.
That, combined with the prospect of mixing beans, means some insiders such as Luis Zubizarreta, vice president of industry group AC Soja, are not very worried.
"There could be a decrease in soy exports, and a little more could be milled locally, but I don't think it is going to be anything extreme," he said.
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