Argus Murmurings: Increased containerized freight rates could lower imports

Organic soybean imports in July 2024 are estimated at 27,200t (metric tons), compared to just 100t in the same month of the prior year. Imports were also 10 times that of the prior month. Argentina was the majority supplier with 26,500t. Paraguay supplied the remaining 700t.

The Argus AgriMarkets Organic and non-GMO service weekly delivered spot price for feed-grade organic soybeans delivered to the U.S. Corn Belt for the week ended August 23, 2024, was $19.61/bushel, which is down $0.30 from the prior month and $1.74 from the prior year.

Containerized freight rates for importing organic soybeans into the East Coast from South America have risen significantly in recent weeks, according to market contacts, while bulk shipment costs have remained relatively unchanged. The increase in containerized freight rates comes right as new crop exports from South America are becoming available. The high freight rates for containerized shipments are likely to make any organic soybeans imported this way uncompetitive with domestic soybeans. Containers have become more difficult to come by, which has also made it hard for some importers to find shippers with sufficient capacity. Since bulk rates have not seen a similar increase, more bulk shipments of organic soybeans, especially out of South America, are expected until container rates decline. The greater cost of importing organic soybeans could help provide bullish pressure to domestic organic soybeans if bulk shipments are unable to meet East Coast demand.

Energy and commodity price reporting agency Argus acquired Mercaris, the leading provider of organic and non-GMO agricultural commodities in the US, in June 2023. The company is an SSGA member and a monthly contributor to the SSGA E-newsletter.