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August 29, 2019

Argentina May Start Exporting Soybean Meal to China

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

As the trade war between China and the United States drags on, China is turning more toward South America for its source of soybeans. Brazil is the largest soybean producer in South America and the world's largest soybean exporter with the vast majority of their soybean exports going to China. Argentina produces about half as much soybeans as Brazil, but they are the largest soybean meal exporter in the world. China generally wants in import soybeans for its domestic crushing industry, but that may start to change.

A Chinese delegation is in Argentina inspecting soybean crushing facilities in preparation for authorizing some of the facilities to start exporting soybean meal to China. China currently imports only a small amount of soybean meal from neighboring Asian countries

The majority of the more than a dozen soybean crushing and export facilities in Argentina are concentrated along the Parana Rive near the city of Rosario. In 2016, the industry crushed a record 44 million tons of soybeans, but the industry has the capacity to crush 65 million tons annually. After recovering from a severe drought during the 2017/18 growing season, it is expected that the industry will set a new crushing record in 2019.

Argentina has the potential to be the first large scale soybean meal exporter to China as the country searches for alternative sources of soybeans to fill the void due to reduced U.S. exports.