Argentine soyoil price plummets due to EU biodiesel duties
Argentina is also the world's No. 3 exporter of soybeans and corn. But President Cristina Fernandez, re-elected in 2011 on promises of increasing government's role in the economy, stresses the need to develop value-added export industries such as soyoil and soymeal livestock feed.
Rather than being satisfied with importing South American soyoil and meal, China is investing in more crushing plants to convert soybeans into these derivative products on its own soil. This poses another threat to Argentina's domestic crushing industries.
Argentina's soyoil sales to China amounted to 31,300 tonnes in the first quarter versus 47,198 tonnes in the same 2012 period. Sale of raw Argentine beans to China increase by 66 percent in the same time frame.
"China was once a great buyer of Argentina soyoil," said Rogelio Ponton, an analyst with the Rosario grains exchange. "Now they are crushing their own."