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21/06/2017 0:00 - Agricultural Commodities Market
PATRICIA BERGERO - JULIO CALZADA
With soybean prices of 2008, we could have had USD 8.7 billion more
 

For the purpose of having an idea of the impact of agribusiness and the oilseeds complex for the economy in our country, we wanted to analyze the evolution of the export prices of the main oilseeds complexes in the main exporter countries or regions, covering a total of 17 products (Oil World Statistics and Thomson Reuters as the main source of information). The products and their respective prices were the following:

Soybean Complex: a) soybean Brazil, CIF Rotterdam; b) USA soybean oil, FOB Gulf de México; c) soybean oil, FOB Argentina; d) soybean oil 48%, FOB Brazil; e) soybean pellets 47%, FOB Argentina.

Peanut Complex; peanut oil from any origin, CIF Rotterdam.

Sunflower Complex: a) sunflower USA, CIF Amsterdam; b) sunflower meal and sunflower oil Argentina, FOB Argentina ports; and c) sunflower meal from Ukraine, DAF price (delivery on border).

Rapeseed Complex: a) Europe colza seed 00, CIF Hamburg; b) colza oil Holland, FOB Ex mill; c) colza meal 34%, FOB Ex mill Hamburg.

Palm Complex: a) palm oil RBD, FOB Malasia; b) palm olein RBD, FOB Malasia; c) almond oil from Malasia, CIF Rotterdam.

Other products: a) corn oil United States; FOB Gulf; b) corn oil, United States, FOB Gulf; b) domestic olive oil extra virgin max. 0.8 % ffa. España; FOB Ex Mill.

Prices were analyzed for the following periods or dates, once again taken as source of the information the data of Oil World Price Survey and Thomson Reuters:

a) Current prices: those prevailing at May 11th 2017.

b) Year ago prices: those prevailing at May 11th 2016.

c) Prices from 3 years ago: those corresponding to May 2014, when export prices of several oilseed complexes were extremely firm and beneficial for exporters like Argentina.

d) Prices to May 2008, before de world financial crisis: those corresponding to that month in 2008, when grain international prices were at record high levels, a momentum of great euphoria for commodities in general. It was when Chinese economy was growing at an annual rate of almost 11%, and world economy and international commerce were blooming. In August 2018, Chicago soybean futures price had reached U$S 602/ton in the nearest position.

 
 
 

In December 2008, the CME soybean futures price had sunk to 290 U$S/ton, from 602 U$S/ton; soy meal and soyoil prices had collapsed. The world financial crisis had a negative impact in all commodities prices, but specially in the agricultural products.

Returning to our analysis, the prices and products that we have analyzed appear in table 1.

 
 
 

We arrived to the following conclusions:

I) What happened with the export prices of these products in 2016?

Soybean complex: Except for soyoil, the rest of the soy complex products suffered deeply falls during in 2016. In this sample, soybean export price fell by 11% while soymeal and pellets prices fell between 15 to 20%. Soyoil remained relatively stable, with a slightly year-on-year rise by 2-3%

Peanut complex: Prices remained relatively stable in the last year, with declines of barely 3%.

Sunflower complex: All export prices fell in 2016, although the biggest decreases are observed in sunflower products, specifically sunflower flour fell 12% and sunflower oil 10%.

Rapeseed meal: Rapeseed and rapeseed oil prices remained relatively stable, but the price of rapeseed meal fell sharply (11%).

Palm complex: In the last year, palm oil and olein prices remained relatively stable, with decreases of only 1 to 2%. Palm kernel oil showed rises but it is not relevant in quantitative terms. The world palm oil production is close to 65 MMT, while that of palm kernel oil is 6.9 million ton.

Corn oil: Prices fell 9% in 2016.

Olive oil: This is the only product that showed a positive evolution. Its export price went from USD 3,549 / to 4,410 /ton; which means a significant increase of 24%.

II) What happened in the last three years (2014 to 2016), when there were very good prices for these products?

Soybean Complex: There were very strong prices falls in all the products of the complex in the 3-year period. A terrible situation for Argentina and its trade balance. The soybean export price dropped 31% while soymeal price retreated 37%.

Sunflower Complex: Very strong falls also happened in the export prices of all complex products in the last three years. There was a drop of prices in sunflower oil of 19% in the 3-year period, of 21% in sunflowerseed and of 23% in sunflower meal and expellers. The sunflower complex in Argentina represented an income of USD 739 million in exports during 2016.

Rapeseed complex: Strong declines in the prices of all its products in the last three years. Rapeseed export price dropped by 21%, rapeseed oil fell 13% and meal dropped 29%.

Palm complex: Strong prices down by around 17% in the 3-year period for palm oil, palm olein and palm kernel oil.

Peanut complex: Peanut oil prices shows greater volatility historically. The CIF Rotterdam price for peanut oil was USD 2.200 /ton in May 2008; it dropped to USD 1.190/ton in May 2014 and had some recovery to USD 1,550 / ton in May 2017.

Corn oil: Relatively stable. Three years ago the price was at similar level to the current one: USD 985 versus 995 per ton.

Olive oil: It has the price that everyone would want to have. Its price today is 60% higher than 3 years ago: USD 4.410 /ton (based on extra virgin olive oil Spain Ex virgin FOB Ex Mill, max.0.8% ffa).

III) What can we say about the current prices in comparison to the excellent values of May 2008, before the global financial crisis?

The current soybeans export price showed a fall of 20% compared to before the 2008 crisis. It rose from USD 561/ton in May 2008 to USD 396 /ton in May 2017. Soybeanoil fell 45% (from USD 1,373 / t to USD 760 / t in the same period).

Argentine soybean pellets fell 30% (from USD 457 US $ / ton in May 2008 to USD 321 / ton in May 2017).

The rest of the products showed greater falls. Between 2008 and present dates, the sunflower oil export prices dropped 59% (from USD 1,770 to 725 / ton), sunflower seed 47%, and corn oil 56%.

The only two products that are exhibitin higher export prices than in 2008 (before the crisis) are sunflower meal and olive oil.

IV) If we had have in 2016 same prices than in May 2008, how much more would have meant the exports of the Argentinean soybean complex?

See table 2. According to INDEC data (official information), soybean complex exports reached almost USD 18,500 million in 2016. If we apply the prices of May 2008, we conclude that Argentina could have exported in 2016 about USD 27.2 billion. That is about 8.7 billion dollars more than the final value of last year.
 
 
 
 

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