Shipments of agro-industrial products fell in the first six months of the year

Shipments of agro-industrial products fell in the first six months of the year

The drop is explained by a lower grain tonnage dispatched, as a result of the lower production in the current campaign. Vegoil shipments, however, show a strong increase. Asia remains as the main destination for dispatches.

During the first half of the year, Argentina shipped a total of 48.4 Mil Mt of grains, by-products, and oils, 10.9% less than in the same period of 2020. This drop is mainly explained by the lower dispatch of grains: 27.9 Mil Mt were shipped between January and June, 19% less than the first half of last year. Meanwhile, shipments of by-products also suffered a cut, although of a lesser magnitude, since this year’s volume was 16.5 Mil Mt, compared to the 17 Mil Mt of 2020. This translates to a fall of 2.8%.

On the other hand, the situation of vegetable oils shipments is very different. The international demand for these derivatives has remained considerably high since the end of last year, and for the mentioned period, 4 Mil Mt were shipped from Argentine terminals, exceeding the 2020 mark (3 Mil Mt) by 37.1%.

Shifting the analysis to each of the categories of Argentine grains, we can see that the fall in grain cargos is explained, fundamentally, by the decrease in shipments of the three main grains exported from our country: wheat, maize, and soybean.

First, wheat shipments from Argentine port terminals during the first six months of the year totaled 6.2 Mil Mt, which represents a 24% drop compared to 2020 and 16% compared to the last three-year average. This is a result of the lower cereal production obtained during the last cycle, a consequence of the severe drought that affected the country’s production, particularly in the central and northern regions, which reduced exportable balances.

Second, maize shipments so far this year have reached 16.7 Mil Mt, indicating a 15% drop compared to the same period of the previous year, although exhibiting an increase of 5% compared to the last three-year average. Although corn production in the current cycle was practically identical to that obtained the previous year, this decrease in shipments responds to another phenomenon. The aforementioned drought that affected national wheat production also considerably delayed maize planting, deriving to a smaller planted area for early maize and a larger area for second-crop corn. This led to lower availability of grains in the first months of the trade season that began in March, and, therefore, to a lower shipped tonnage of the cereal. However, the increase in the late-corn area leads us to expect a considerable volume of cargo to be shipped between July and August, so the tonnage at terminals in the coming months may show a bounce-back and narrow the gap.

In third place, SB shipments amounted to 1.7 Mil Mt in the first half of the year, registering a 60% drop vs. 2020 and 38% vs. the average of the last three years. As in the case of wheat, the lower SB production obtained during the new cycle as a result of the drought in February reduced the exportable balance of the oilseed. But we must also consider another factor here: the strong international demand for SB by-products, particularly oil, has strongly raised prices and improved the industry’s margins. This way, it is projected that a greater tonnage of the oilseed will be processed locally and exported as by-products, instead of being shipped as virgin soybean.

A special mention deserves what happened with the cargos of barley and sorghum. These grains have shown a noticeable increase in shipments during the first six months of the year: barley grew 18% compared to 2020, while sorghum more than doubled the shipments of the first six months of the previous year. In both cases, this is due to strong Chinese demand for both crops, particularly for use as fodder.

Finally, an interesting analysis comes from studying the cargos shipped by port. As we can see, it’s those ports located on the banks of the Paraná River (and in particular, those located in the Great Metropolitan Area of Rosario city) which have seen their shipments reduced the most. The ports of Rosario and San Lorenzo cities show a drop of 31 and 24%, respectively, while shipments from Villa Constitucion city increased 4%, although it should be noted that, in absolute terms, the tonnage is not very relevant. At the same time, the southern ports of the province of Buenos Aires only registered a 2% drop. On the one hand, this is explained by the severe downspout that affects the Paraná River, the most pronounced in over 50 years, and, on the other, to the fact that the production of wheat and barley in the area of influence of the Buenos Aires seaports were not affected, unlike what happened further north. Therefore, shipments of these grains from Bahía Blanca and Necochea cities did not suffer the reduction that shipments from the rest of the port terminals did.

Turning now to oil cargos, except for safflower, all vegetable oils have seen a considerable increase in shipments during the first six months of 2021, which is consistent with the aforementioned global appetite for oils. In relative terms, it is cotton oil that exhibited the greatest increase, more than quadrupling the tons shipped during the previous year. However, in absolute terms, SBO takes the prize: between January and June, 3.7 Mil Mt were dispatched, which means 874 thousand tons more than in the first six months of 2020. In addition, all the country’s ports increased their Oil shipments so far this year, both in the year-on-year comparison and concerning the average of the last three years.

Finally, another interesting aspect to analyze is the destinations of the shipments of grains, by-products, and oils from the Argentine port terminals and how they have evolved in these first six months of the year.

In the first study, we can observe that 49% of shipments are destined for the Asian continent. Then, in decreasing order of importance, they are followed by America (19%), Africa (18%), Europe (13%) and finally, Oceania (1%).

Disaggregating this information by country, Vietnam stands as the main destination for all shipments made: between January and June, 5.1 Mil Mt of grains, by-products, and oils were shipped to that country, below the volume shipped in the first six months of 2020 (6.8 Mil Mt). Another noteworthy fact is that the difference with runner-up China (second most important destination) is considerable since 3.5 Mil Mt were shipped to the Asian giant. In addition, shipments to the Oriental country were slightly reduced from 3.8 Mil Mt achieved in the first six months of 2020. Lastly, third place goes to Brazil, with 3.4 Mil Mt, also below the figure of the previous year (3.6 Mil Mt).

On a final note, if we scrutinize each category, we’ll quickly see that most of the grain shipments so far this year have had China as their main destination (3.2 Mil Mt, equivalent to 12% of all grains exported), while Vietnam was the chief destination for by-products shipped from Argentine ports (1.9 Mil Mt, that is, 11% of the total). As for vegoils, India is established as the main Argentine client, and so far this year 1.7 Mil Mt have been dispatched, 41% of the total vegetable oils dispatched from Argentine port terminals.

Source: https://bcr.com.ar/

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