With declining demand for biodiesel, Argentina exports of soybean oil have been rising despite lower crush. Local year 2020/21 (April-March) soybean oil exports are estimated at 5.9 million tons, 800,000 tons above the previous year, and come despite a 4-million-ton decrease in soybean crush and 600,000-ton decline in soybean oil output.
Biodiesel exports, produced primarily from soybean oil, have declined from nearly 1.8 million tons in 2017/18 to an estimated 400,000 tons in 2020/21. Relatively low global energy prices, barriers to imports, and recently, higher vegetable oil prices, all play a role in reducing biodiesel export prospects. This has freed up an estimated 750,000 tons of soybean oil for the food market and for exports.
Demand for soybean oil exports remains strong. Exportable supplies in Brazil and the United States are down in response to growing diversion of supplies to the fuel markets. Prices for competing oils have risen faster than those for soybean oil, while palm oil supplies remain tight on lower production growth.
Argentine soybean producers have been reluctant sellers this year. Despite the rise in global prices, high inflation, export taxes, and a strong peso have discouraged producers from selling additional supplies of soybeans beyond the amount needed to meet expenses.
Additionally, while soybean prices have risen on strong China demand and growing demand for crush in Brazil and the United States, global import demand for soybean meal has lagged in comparison due to its relatively small discount to soybeans. Given Argentina’s role as the largest soymeal exporter, without strong demand for soybean meal exports, boosting soybean oil supplies by expanding crush is difficult.
Consequently, with most of the reduction in biodiesel exports already in place and amid difficulties in raising crush, additional expansion in Argentina’s soybean oil exports may be difficult to achieve in the coming year (April 2021-March 2022).