The new boost for Argentine exports in 2024

At a crucial time for the Argentine economy, the country’s exports are experiencing a significant boom, marking a turning point towards economic recovery and financial stability. This new impulse is based on a series of factors, including the diversification of markets, the improvement in the competitiveness of Argentine products and the strengthening of international trade relations.

Despite a challenging start to the year, characterized by a drop in exports from regional economies in January, due to adverse weather events that affected production and the volume sold, a better outlook is projected for the coming months. Food prices, on the other hand, are adjusting in line with international trends, which promises a more favorable scenario for Argentine foreign trade.

After the debacle of 2023, when Argentine agroindustrial exports collapsed by 35.8% due to the combination of a severe drought and inclement international prices, the outlook for the current year looks promising.

With a favorable climate forecast for the coming months, driven by the “El Niño” phenomenon, the 23/24 campaign is expected to contribute significantly to the Argentine economy. According to a report by the Agricultural Foundation for the Development of Argentina (FADA), it is projected that in 2024 the South American country can earn between 50,000 and 55,000 million dollars from its external sales of the agroindustrial and agro-export sector, which would mean a rebound of between 29% and 41% compared to the 38,835 million dollars exported in 2023.

On the other hand, the beef industry is demonstrating remarkable performance. According to official data, meat exports have reached record figures, surpassing historical marks of the last 57 years. The cumulative total for the January-February 2024 two-month period has also registered a record, with external sales reaching 160,000 tons.

These achievements are partly attributable to a change in export policy implemented by the National Government, which has placed a strong emphasis on adding value to livestock chains, especially in the beef sector. This strategy has opened new opportunities in the international market, positioning Argentina as a key player in the meat industry worldwide and confirming a trend of sustained growth in exports in this sector.

Factors at play

There are several reasons that fuel this optimism in the projections for this year. Firstly, the productive recovery after the prolonged drought that affected much of the country during the previous cycle would allow the rebuilding of exportable volumes destined for the main external markets.

Exchange competitiveness appears as another factor that looks favorable for Argentine exports with an exchange rate that has depreciated against the main currencies with billing frequency, such as the dollar, the euro or the Chinese yuan.

However, one of the factors that could moderate these bullish projections would be the behavior of international prices of agricultural commodities, which so far have shown bearish signs although they may be reversed depending on the weather conditions in the main growing areas and aspects. as the evolution of global demand.

With particular regard to the latter, the outlook for external demand appears to be neutral: while some regions such as Europe and China are going through economic slowdowns that could negatively impact their imports, other key markets such as Southeast Asia would maintain sustained demand. for vegetable proteins to supply its growing intensive livestock and aquaculture industry.

First partial 2024

According to official data from the Argentine Government, in the first month of 2024, Argentine national exports reached 5,398 million dollars, a figure that implied an interannual increase of 9.6% compared to January of the previous year and which ended 13 months consecutive declines in the country’s foreign sales.

This increase in the export value was mainly explained by the greater quantities exported of primary products such as wheat and corn cereals, and the star regional oilseed: soybeans and their derivatives, oil and protein meal. Greater shipments of fuels and energy such as crude oil also had an impact.

In detail, the most significant increases in Argentine exports in January were wheat for 416 million dollars, crude oil oils for 130 million, corn for 127 million and soybean meal with 70 million more than in the same month of 2023. .

On the other hand, some key exports showed declines, such as natural gas in its gaseous state, with 48 million less in its external turnover.

In the specific case of the most relevant oilseed complex for the Argentine agribusiness such as soybeans, January showed a combination of lower prices for derived products compared to 2023 but with an increase in exported volumes. In this way, for example, crude soybean oil contracted by 92 million dollars, although the quantities exported increased.

Specifically, the average external prices for that month showed drops of 28.3% in crude oil, 13.2% in soybeans and 7.6% in flour and protein pellets.

However, in terms of exported quantities, increases of 3,263.2% were observed in soybeans, 21.7% more in flour and pellets, and an additional 4.9% in crude oil shipments.

Imports, meanwhile, totaled 4,601 million dollars with a decrease of 14.3% in the interannual comparison, mainly due to lower purchases of capital goods, parts and accessories, and some inputs such as fuels, lubricants and consumer goods. .

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The star is still soybeans

The global oilseed processing industry is going through a period of widespread strengthening and expansion, driven by the growing demand for vegetable oils for various industries, especially biofuels. After the production period of 2020/21 and 2021/22 with stagnant global levels, global production of major vegetable oils rebounded by 10 million tonnes in the 2022/23 marketing year. And the projections for the current 2023/24 cycle predict a new increase of 5.1 million tons.

This renewed dynamism has found one of its main drivers in the industrial processing of the most demanded and processed oilseed on a global scale: soybeans. It is estimated that around 45% of the increase in the supply of vegetable oils expected for the 2023/24 campaign will come from the increased grinding of this plant.

In this way, the main agro-exporting countries are getting ready to meet what will be historical records in shipments abroad of this product in demand for animal nutrition.

Brazil and Argentina, the two largest exporters of soy protein meal, would have a practically equal industrial crushing capacity in 2023/24, around 46-47 million tons per year, after the Brazilian nation has strongly increased its plants. processors in recent years.

The United States, for its part, would remain the third largest global supplier with a planned grinding of 59 million tons for this campaign after several years of strengthening its oilseed industry.

With the normalization of agricultural production after the great impact of the drought, the Argentine agribusiness is getting ready for a year of recovery that, hand in hand with the global increase in oilseed processing, promises to witness record levels of exports.