Argentina Soy Crushers Meet With China on Path to Meal Approval

(Bloomberg) -- Argentina’s soybean crushers are hoping they will soon be able to export their animal feed to China for the first time.

A Chinese customs delegation inspected plants along the Parana River last week, and the officials will now take about 30 days to produce a report that could pave the way for Argentina to export soy meal -- used as animal and fish feed -- to the Asian giant, Gustavo Idigoras, head of crop export and crushing chamber Ciara-Cec, said in an interview. Ciara-Cec’s members include agricultural trading heavyweights Bunge Ltd., Cargill Inc. and Louis Dreyfus Co.

The Chinese delegation visited crushing plants run by Bunge, Louis Dreyfus, Cargill, Aceitera General Deheza SA, Renova, which is a joint venture between Glencore Plc and Vicentin SAIC, Cofco Corp., and Molinos Rio de la Plata SA, Idigoras said. A spokesman for Senasa, Argentina’s agricultural sanitary service, confirmed the visit to seven plants.

Argentina doesn’t currently export soy meal to China, which prefers to buy raw beans and crush them itself to spur industry at home. The Asian country is importing more of those raw beans from Argentina, with purchases forecast to rise to 9 million metric tons this year from 3.3 million last year, Idigoras said.

Approval of Argentine meal would likely be interpreted as a signal to U.S. President Donald Trump, whose trade war with Beijing has hurt America’s soy farmers. It would also come at a time when China is expanding its footprint in Latin America by developing infrastructure projects across Argentina, from hydroelectric plants to railways.

Being able to export to China would be a boost to Argentina’s crushers. Profit margins have been dented because of rising bean prices and a change last year in Argentina’s tax system that makes exporting raw beans more competitive. Idle capacity has increased to more than 50%, Idigoras said, and crushers are accounting for about half of Argentina’s raw-bean shipments, when the share is usually just 20%.

©2019 Bloomberg L.P.

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