China not buying Argentina's soyaoil

Argentine soya processors are operating at a loss this year because China has not resumed soyaoil purchases despite resolving a trade row with the South American country, an industry group said on Thursday. The South American country is the world's No 1 soyameal and soyaoil exporter, as well as its third-biggest soyabean supplier. Multinational giants such as Cargill, Bunge and Louis Dreyfus have soya crushing plants in Argentina.
"So far the margins have been bad. They're operating at a loss," Alberto Rodriguez, president of the CIARA-CEC industry group representing leading grains exporters and crushers told the Reuters Latin America Investment Summit in Buenos Aires.
"The problem today is that China is not buying (soyaoil), and China was our biggest export market," Rodriguez said. "We have to lower the price to sell the oil elsewhere." Commodities-hungry China had complained early last year about the quality of Argentine soyaoil and Argentina's imposition of import curbs on Chinese manufactured goods.
Some exports of Argentine soyaoil briefly resumed to China in October, but no shipments have been made since then, Rodriguez said. India has replaced China as Argentina's top soyaoil buyer, but Rodriguez said exporters feared that market could be at risk as the Argentine government increases import restrictions, affecting Indian-made products.
"This year India is the top destination we have for absorbing the excess (soyaoil). But we're worried because our current top client is threatening us with halting purchases. We have a problem," Rodriguez added. India's ambassador in Buenos Aires told local media this month that his country's soyaoil purchases could be affected after Argentina took fresh action to curb imports and prop up its shrinking trade surplus.
"The government said it was in talks with them (Indian officials), but I'm very worried," he added. The Buenos Aires Grains Exchange sees the 2010/11 soya harvest at 48.8 million tonnes, slightly below the Agriculture Ministry's estimate of 50 million tonnes. By Thursday, farmers had gathered 7 percent of the 18.5 million hectares planted with 2010/11 soya, 6.5 percentage points behind last season's harvesting pace, the grains exchange said in a weekly report.