"Thanks to the drought, a golden opportunity gained"... 'US Soybean Residue' Smiles at Argentina Drought

Soybean Powerhouse Argentina Faces Sharp Production Drop Due to Drought
US Soybean Meal and EU Alternatives Gain Spotlight
Noted as Eco-Friendly Biodiesel Fuel

Drought in Argentina is expected to provide a golden opportunity for U.S. soybean meal exports. Soybean meal is the residue left after extracting soybean oil; it was traditionally used as animal feed but has recently gained attention as a raw material for biodiesel.

According to the U.S. financial media 'Bloomberg' on the 24th (local time), the U.S. Department of Agriculture (USDA) forecasts that U.S. soybean meal exports will reach an all-time high next year.

In the report published by the USDA, the U.S. soybean meal export volume for the 2023 fiscal year, which ended last September, was 13.1 million tons (t). In terms of value, this amounts to 7 billion dollars (approximately 9.4087 trillion KRW).

The export volume for the next fiscal year is estimated to increase by 800,000 tons to 13.9 million tons compared to this year.

Soybean meal, the residue left after extracting soybean oil [Image source=Captured from Agrifeeds]

The increase in U.S. soybean meal exports is driven by demand for eco-friendly fuels such as biodiesel. Biofuels are mainly made from vegetable oils like canola oil, but recently soybean meal has also attracted attention.

Meanwhile, the U.S. has also benefited from a 'spillover effect' due to the severe drought in Argentina, one of the world's largest soybean exporters. Because of the sharp decline in soybean meal supply caused by Argentina's drought, major importers such as the European Union (EU) and Vietnam have turned to U.S. soybean meal.

Regarding this, the USDA stated, "The U.S. produces more soybean meal than domestic demand requires, so it will be able to supply more to the global market," and added, "It is expected to have a competitive advantage in price competition against South American soybean meal."

Meanwhile, Argentina has been experiencing severe drought caused by El Ni?o since the beginning of this year. This has reduced agricultural production and threatened economic growth.

Earlier, the Argentine government estimated that the GDP loss due to drought would reach about 20 billion dollars, and the economic growth rate would decrease by 3%. Argentina is one of the world's largest grain exporters.

The market research firm 'Gro Intelligence' analyzed, "Soybeans are a major export product of Argentina and an essential item for its foreign currency earning strategy," adding, "The recent drought levels in Argentina's soybean cultivation areas have risen to a 'severe' level." Argentina's soybean meal export volume this year has plummeted by 42% compared to the average of the past five years.

This content was produced with the assistance of AI translation services.