Mercaris Murmurings: New Argentine leadership could impact organic soybean imports

Organic soybean imports in Nov. 2023 increased significantly to 28,000 MT, an increase of 56% y/y and 2200% m/m. Argentina was the largest source with 16,000 MT, followed by Turkey with 8,000 MT. Uruguay and Ukraine both sent 1,000 MT. This was the first month that Ukraine has exported organic soybeans to the United States since Oct. 2022.

Domestic organic soybean prices recovered in November. The price of feed-grade organic soybeans delivered to the U.S. Corn Belt averaged $22.00 during November, which is down $0.15 from the prior month and down $7.49 from a year prior. Organic soybean trading has been quieter than usual for this time of year but has picked up from recent months.

The recent election in Argentina, a major source of organic soybeans, has raised questions about the potential dollarizing of the Argentine economy proposed by the new president would affect exports. In recent years, the Argentine economy has been affected by significant inflation, which has made farmers hesitant to export their grain. Grain stored on farm will be paid for with U.S. dollars when exported to the U.S., so while held on farm the value is not affected by the persistent inflation. When farmers do sell the grain and convert the revenue into Argentine pesos, it then becomes vulnerable to inflation and can lose value quickly. Farmers are then incentivized to hold onto their grain for longer. If the Argentine economy was converted to U.S. dollars, then farmers would have less of an advantage to carrying grain rather than selling it for export. This could help to front end Argentine exports more heavily towards harvest. However, a recent increase of 3% points for export duties will hamper some agricultural exports.

Mercaris, the nation’s leading market data service for organic and non-GMO agricultural commodities, is an SSGA member and a monthly contributor to the SSGA E-newsletter