Chinese agribusiness giant COFCO International has closed its Argentine edible oil processing plant as it struggles with the effects of country’s recession and the US-China trade war, Bloomberg reports.
“A significant reduction in local demand, unfavourable market conditions and rising idle capacity” had led to the closure of its Legitimo plant, in Lanus, Buenos Aires, COFCO said in a statement on 4 January. The plant refined soyabean and sunflower oil.
COFCO said its decision to close the refinery would allow it to focus investments on sourcing oilseeds and crushing them for export.
Bloomberg wrote that Argentina was currently in a recession with soaring interest rates – introduced to tackle inflation and the weak peso –crippling economic growth. China’s trade war with the USA, drought and a tax change had also led to less work for the country’s oilseed crushers, with idle capacity reaching about 50% because US competitors have been buying soyabeans cheaply after China disappeared as a customer.