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EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

Soy boon for Argentina as Ukraine war boosts prices

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LOBOS: Russia’s war on Ukraine has sent grain prices skyrocketing — a worry for consumers worldwide but potentially a boon for producers like Argentina, which hopes an influx of soybean “agridollars” will boost its faltering economy.


South America’s third-largest economy is the biggest exporter of soybean meal and oil in the world, and only the United States and Brazil export more soybean grains.


Soy represents nearly a third of Argentina’s exports and in 2021 contributed $9 billion to the state coffers.


This year, the sector is expecting record sales of $23.7 billion — about $700 million more than in 2021 — despite a 10 per cent smaller harvest due to severe drought.


“The prospects for the producer are good... There is optimism,” said Martin Semino, who sells farming equipment and presides over the Rural Society of Lobos, a fertile agricultural zone southwest of Buenos Aires.


The harvest season is at its height, and workers are labouring from dawn to dusk to clear the fields before the autumn rains arrive.


“Soy is the dollar, the currency of the countryside’’, Semino said.


In the past, the grain has been a savior for inflation-troubled Argentina.


A soybean boom in the 2000s is widely considered to have helped the country recover from its worst economic crisis in 2001.


In the last 40 years, the planted surface area of soy has multiplied 14 times.


Argentina is also a major producer of sunflower oil and wheat — other grains affected by the ongoing war.


After a record sunflower harvest of 3.4 million tonnes in 2021-2022, the area under cultivation is set to increase by 17 per cent this season to two million hectares (4.9 million acres).


The country also had a record wheat harvest this season.


Estimates are that in 2022, Argentina’s agroindustrial exports will bring in a record $41 billion — about $3 billion more than in 2021.


“With prices close to historic records, Argentina, which always needs dollars, must seize the moment’’, Tomas Rodriguez Zurro, an analyst at the Rosario Stock Exchange, said.


The rise in prices “is temporary, it will end when the war is over’’, he cautioned. — AFP


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