Soybean Oil Prices Expected to Shrink in Argentina Due to Lower Production

The prices of Soybean Oil continued to demonstrate dwindled sentiments as the cost declined by around 13 percent, which was more than expected in the month of April. According to the most recent World Agriculture Supply and Demand Estimates (WASDE) report published on April 11 by the US Department of Agriculture, Argentina will experience a significant decline in Soybean Oil production through the end of the 2022-23 marketing year as a result of the country's ongoing, historic drought being one of the chief reasons for this dip in the cost for Soybean Oil in Argentina.

Moreover, due to the hot and dry weather, the production is expected to be around 6 million tonnes less than its previous prediction of more than 26 million tonnes. Argentina is estimated to import a record of around 8 million tonnes of Soybeans this year, more than double its total a year ago, as per the reports. If realized, it would represent a more than 37 percent decline from last year's output of approximately 44 million tonnes and less than half of the record total. Additionally, the global Soybean production for 2022–2023 decreased by approximately 6 million tonnes to about 370 million tonnes, according to the WASDE report. Reduced supplies and a slow pace to date have led to a decrease in Soybean crushing in Argentina, China, Bangladesh, Pakistan, and Egypt. With higher stocks for China and Brazil, Soybean ending stocks are slightly higher.

Also, Lower product exports resulted from Argentina's Soybean overcome being reduced by more than 2.9 million tonnes to approximately 31 million tonnes, which was the lowest level since 2008-09. As Argentina is considered one of the top exporters of Soybean meal globally, its exports are projected to decrease this year to around 223 million tonnes, likely the lowest level in 19 years.