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Argentina imported 3M tonnes of soyabeans from neighbouring Brazil and Paraguay in the first four months of this year, according to a report by the United States Department of Agriculture (USDA).

The increase in Argentine imports came against a backdrop of a severe drought in the South American country, with soyabean production reduced by a further 2M tonnes in June to 25M tonnes, the lowest level in more than two decades, the USDA’s Foreign Agricultural Service (FAS)’s Oilseeds: World Markets and Trade report said.

While soyabean production in Argentina was forecast down 43% compared to 2021/22, crushing was only projected to be 23% lower, mainly due to strong demand from Argentine crushers.

“Monthly crush[ing] has been slower than past years, but crushers have been able to procure soyabeans due to “soy dollar” exchange rate policies that incentivised farmer selling earlier in the year and strong imports of soyabeans over the past few months,” the USDA said.

“Fortunately for Argentine crushers, there are ample exportable supplies in neighbouring countries.”

According to data from the Argentina National Institute of Statistics, the increased volumes brought Argentina’s total October-September imports to a record 8.7M tonnes.

Paraguay – typically the leading soyabean supplier to Argentina – had already shipped a record 2.6M tonnes between January-April this year, the report said.

“Exportable supplies [in Paraguay] are up this year due to a more than doubled crop from last year’s drought, reduced exports to Russia since the start of the war in Ukraine, and reduced import demand from Brazil. Likewise, calendar year exports from Brazil through May are at an all-time high due to record production,” the USDA said.

In addition, Argentina was also importing soyabeans at a record pace from Bolivia – not traditionally a significant soyabean exporter – according to the report.

Growing production and Argentine demand had boosted Bolivia’s 2023 exports until April above 130,000 tonnes, the report said.

Meanwhile, Uruguay – traditionally a minor soyabean supplier to Argentine crushers – would have limited exportable supplies this year as production had also been hit by drought.

While it was highly atypical, the USDA said the USA had shipped 2M tonnes of soyabeans to Argentina in 2018/19 during a previous drought.

However, due to record supplies in Brazil it was unlikely Argentina would need to source soyabeans outside South America to meet crushing demand, the report said.