**7. Conclusions**

384 Soybean Physiology and Biochemistry

These river port terminals deliver 76% of the cereal, oilseeds protein meal and vegetable oil

The grain solid by products storage volume in the Paraná Hydroway ports grew from 1.5 million tons to almost 8 million. The cargo boats rhythm, in turn, grew from 23 million tons per hour to 54 million tons between 1990 and 2007. This operative capacity growth also allowed a growth of the Up-River exports from 13.5 million tons to 54 million tons as regards grains and pellets, at no extra costs of storage or delays of the cargo boats stays

At an international level, it is considered that soybean prices will keep growing. This conclusion is drawn from the soybean world market indicators (supply, demand, stock, consumption) and ratified by the wider expansion of the world demand regarding the supply. If finantial speculation is added, the positive trend towards rising prices gets stronger. This conclusion is drawn after an analysis of the following factors (USDA, 2010): - Grain production growth motivated specially by the larger demand of developing countries (DC) (consumption growth of food and forage for animals due to the per



It is expected that the good crop perspectives determine that the area planted remains and/ or increases, depending onthe economic perspectives of other summer crops, specially corn. In Argentina, it is expected that in the short–medium term the discontinuous purchase of soybean oil will continue to be done by China due to the commercial barriers implemented by the government of Argentina and China, except that an agreement between both countries is reached. This has caused that the oil exports go to other countries which buy this oil at a lower price40. So, the Argentine oil industry -which is one of the most efficient in the world– gets lower prices and, furthermore, works under its

At a national level and at the primary production link, there have been and there are conflicts between the soybean protagonists (soybean producers, agrochemical companies, commercial companies; etc) and different groups that question this "soybean production system", in Argentina41. Among those who question this "soybean production system", it can be mention the small and medium farmers, aborigine communities and countryside workers expelled by the spreading of soybean sowing. At the same time large company

40 The argentine soybean oil quotation suffered a discount with respect to other markets like the Brazilian one of up to U\$D 75.5 per ton (average of U\$D 50 per ton). These figures affect the almost 6

41 In the mid 70s and with the use of new varieties, the sowing of two annual crops (doble –sowing) was possible. These crops are combined with the wheat production (short cycle wheat) and therefore the double crop wheat-soybean appears. This process originated a larger agricultural process (cattle is left


million soybean oil tons that Argentina would export in the current season

aside) but soybean also leaves aside crops like corn and sorghum

exports and the rest of the river port terminals deliver 4% of global cargo.

**6. Future context for the Argentine soybean chain** 

capita income growth and diet changes).

there will be 21% imports drop).

(SAGPYA, 2007).

expansion).

milling capacity.

Beyond the positive aspects related to the primary production (more security than other crops specially due to weather conditions, considerable finantial rentability, etc) the soybean growth has had positive effectsin Argentina, like the strong investments in new technologies (no-till cropping) biotechnology (transgenic soybean, fertilizers and herbicides), intensive use of agricultural machinery, storage (silo bags), logistics (private ports), net organitation (of services and financing), industrial machinery development, biofuel and agro food development the significant income of currency for the economy, without forgetting to mention the levying of export duties.

<sup>42 &</sup>quot;Los Grobo" Group claims that they grow 150 thousand hectares in Argentina and attemps to control 750 thousand hectares in all the Southern Cone (Paraguay, Brazil and Uruguay).

<sup>43</sup> Beginning of the century: 100 million hectares in forests, at the end of XX century: 33 million hectares

Without minimazing the positive effects or the conflicts brought about by the soybean expansion in Argentina, this crop has also generated a strong dependence44 -a scarce commercial diversification –since only one product (soybean bean and its derived products) represent 25% of the total exported by Argentina (14.041 million dollars) (INDEC, 2009). This exporting dependence gets worse because the diary products, fruit, vegetable oil and meat are considered "Low Technological Level", whereas milling products are labeled as "Middle-Low Technological Level" (the technological content is based on the expenses in I+D) (CEP, 2007). At a Gross Product Level, the soybean chain (2009) represents 5.4% of the national added value (0.77% in the two-year period 73/74).

The strong soybean dependence is also seen in indicators like the soybean crop area and the soybean oil and meal production. At a primary level, soybean covers 54% of the cultivated area (more than 18 million has) over the total implanted (28 million has). For the oil and meal production numbers are more significant: the soybean oil production in Argentina participates in the 79% of all oil manufactured and in the 93% of all the meal produce.

This shows that the oil argentine industry depends basically on soybean. It must be pointed out that the oil industry milling capacity is 57 million tons; 37-38 million of which were used in the year 2010.

This idle capacity cannot be covered with the imports since the current imports regulations mekes it too costly. Thus, the industry competitiveness will be limited to the crops primary production and to the fundamental characteristics of domestic low consumption of byproducts which allow strong exportable balance. This last one, shortened with the current domestic soybean use for biodiesel production.

Finally, the National State role must be examined and also the implemented policies in relation to the agricultural production. During 2011, due to higher expenses45, the National State do not show any sign to eliminate46 the exporting duties47, especially the ones which belong to the soybean complex. These obligations represent (2010) 8.7% of the total taxes. This shows the importance of the exports duties and the dependence of these assets for the expense policies. The exporting duties were 7,400 million dollars; of which 6300 million dollars were collected by the soybean complex (2011).

#### **8. References**

Ablin, E., Paz, S. (2003). El mercado mundial de la soja, la República Argentina y los organismos genéticamente modificados, In: *Las Negociaciones comerciales multilaterales de la Ronda Doha. Desafíos para la Argentina*. Centro de Economía Internacional. (7-54). Instituto del Servicio Exterior de la Nación. Ministerio de Relaciones Exteriores de Argentina. Buenos Aires. Argentina

<sup>44</sup> The risks of non-tariff imposition barriers for genetically modified soybean must be considered. 45 During 2009 and 2010 the State Budget result was negative (income lower than total expenses).

<sup>46</sup> In the National Legislature (Commission) a project to modify the exporting duties obligations is being debated.

<sup>47</sup> In the year 2002 export reimbursements were implemented: the soybean oil 1.6for the raw oil in bulk; 5%for refined oil in containers of 5kg and 0,7% for the raw oil. All the above mentioned refunds were left aside (0%) since November, 2005. The raw oil but the exported volumes of refined oil represent only 3% of all the soybean oils.

Without minimazing the positive effects or the conflicts brought about by the soybean expansion in Argentina, this crop has also generated a strong dependence44 -a scarce commercial diversification –since only one product (soybean bean and its derived products) represent 25% of the total exported by Argentina (14.041 million dollars) (INDEC, 2009). This exporting dependence gets worse because the diary products, fruit, vegetable oil and meat are considered "Low Technological Level", whereas milling products are labeled as "Middle-Low Technological Level" (the technological content is based on the expenses in I+D) (CEP, 2007). At a Gross Product Level, the soybean chain (2009) represents 5.4% of the

The strong soybean dependence is also seen in indicators like the soybean crop area and the soybean oil and meal production. At a primary level, soybean covers 54% of the cultivated area (more than 18 million has) over the total implanted (28 million has). For the oil and meal production numbers are more significant: the soybean oil production in Argentina participates in the 79% of all oil manufactured and in the 93% of all the meal produce. This shows that the oil argentine industry depends basically on soybean. It must be pointed out that the oil industry milling capacity is 57 million tons; 37-38 million of which were used

This idle capacity cannot be covered with the imports since the current imports regulations mekes it too costly. Thus, the industry competitiveness will be limited to the crops primary production and to the fundamental characteristics of domestic low consumption of byproducts which allow strong exportable balance. This last one, shortened with the current

Finally, the National State role must be examined and also the implemented policies in relation to the agricultural production. During 2011, due to higher expenses45, the National State do not show any sign to eliminate46 the exporting duties47, especially the ones which belong to the soybean complex. These obligations represent (2010) 8.7% of the total taxes. This shows the importance of the exports duties and the dependence of these assets for the expense policies. The exporting duties were 7,400 million dollars; of which 6300 million

Ablin, E., Paz, S. (2003). El mercado mundial de la soja, la República Argentina y los

Relaciones Exteriores de Argentina. Buenos Aires. Argentina

44 The risks of non-tariff imposition barriers for genetically modified soybean must be considered. 45 During 2009 and 2010 the State Budget result was negative (income lower than total expenses). 46 In the National Legislature (Commission) a project to modify the exporting duties obligations is being

47 In the year 2002 export reimbursements were implemented: the soybean oil 1.6for the raw oil in bulk; 5%for refined oil in containers of 5kg and 0,7% for the raw oil. All the above mentioned refunds were left aside (0%) since November, 2005. The raw oil but the exported volumes of refined oil represent only

organismos genéticamente modificados, In: *Las Negociaciones comerciales multilaterales de la Ronda Doha. Desafíos para la Argentina*. Centro de Economía Internacional. (7-54). Instituto del Servicio Exterior de la Nación. Ministerio de

national added value (0.77% in the two-year period 73/74).

domestic soybean use for biodiesel production.

dollars were collected by the soybean complex (2011).

in the year 2010.

**8. References** 

debated.

3% of all the soybean oils.


 www.cep.gov.ar/descargas\_new/contenido\_tecnológico\_exportaciones\_ 19962207.pdf


http://www.ers.usda.gov/publications/wrs013/wrs013g.pdf.

