South America Land Report

The South America Land Report for July 30, 2018

Patrick Archer agribusiness

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The Argentina Land Report


Argentina exported fresh beef to Japan this week for the first time in history, according to Cronista. The air shipment of 200 kilos originated at a ranch in the Argentine Patagonia and was processed at the Fridevi meatpacking plant in Rio Negro Province. In a congratulatory tweet, Argentina president Mauricio Macri described the shipment as "Great news" and "an important step toward stronger relations" between Argentina and Japan. The next shipment, a 10-ton container with 13 different cuts of Argentine beef, is scheduled to ship this week. In addition to fresh beef, several sheep producers in Argentina's Patagonia are now authorized to  export high-margin cuts of lamb to Japan." (Cronista

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Why Argentina Is Unbeatable In The World of Soybean Meal Exports, is the headline of a detailed analysis in this week's AgroVoz. "Argentina maybe didn't win the 2018 World Cup, but it remains the soybean meal export champion with 29.47 million tons of production of which 27.55 MT is exported or 43% of the global export total.  According to the report, "The world's other major soybean meal producers (China, US, Brazil) all have much larger populations than Argentina and strong internal meal demand to support domestic beef and milk production." Argentina exports soybean meal and pellets to two dozen countries including Vietnam (13% of total), Indonesia (10%), Spain (6%), Italy (6%), the United Kingdom (5%) rounding out the top 5. (AgroVoz)

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Argentina timber production and forestry exports are finally beginning to rebound, according to an industry report by Andrés Krom in La Nación. "Argentina consumes considerable timber for construction, and the country has 2,400 mills just to meet domestic demand," says the National Timber Industry Director Nicolás Laharrague. In addition, Argentina's timber exports are well diversified with paper (33%), solid wood and furniture (27%), and wood pulp (21%) for cardboard making up the Top 3. The national industry has received a big boost by the strong dollar, says Osvaldo Vassallo, the President of the Argentina Forestry Association (AFOA). He also applauds the government's March roll-out of new timber transports (bitren forestal) which some estimate will reduce transportation costs by 30% and increase loading efficiency by 68%. (La Nación


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The Brazil Land Report


Brazil's Beef Industry Expecting Good News From Russia is the headline of a new article by Raphael Salomão in Globo Rural including an interview with Minerva Foods CEO Fernando Galletti de Queiroz. Queiroz and other Brazilian officials anticipate Russia will lift the temporary ban on Brazilian beef imports sometime later this year. Indeed, initial positive signals were received at this week's BRICS summit in South Africa.  On a related export topic, Queiroz said he believes Brazil is poised to benefit from the growing trade war between the U.S. and China. Brazil's beef export volume to China already rose 30% in the first six months of 2018 (122.8 MT valued at $562 million) compared to the same six-month period in 2017. (94.3 MT valued at $399 million). (Globo Rural)

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Brazil is sending a large delegation of producers and co-op representatives to Mexico next month in hopes that the North American nation will begin to import more Brazilian corn, according to a Reuters report printed in Exame. "We were invited by the Mexican government which tells us they are looking for supply alternatives," says Sergio Bortolozzo, the president of the Brazil Corn Producers Association (Abramilho). Speaking at the 2018 Global Agribusiness Forum in São Paulo, Bortolozzo told attendees that Brazilian corn costs Mexico ten cents more per 60-kilo sack than U.S. corn but added, "our corn, shipped immediately after the second harvest, is a superior quality." Brazil is the world's second-largest exporter of corn after the U.S. (EXAME)

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Chinese companies invested a record US$ 11 billion in Brazilian projects last year ranging from agriculture to banking to port expansions. In fact, Brazil has been on the receiving end of 55% of all Chinese investment in Latin America since 2003. And while the numbers are impressive, the president of the China-Brazil Business Council says governments in the region need to wake up. "Latin American countries including Brazil have a very passive attitude in relation to China. The Chinese know exactly what they want from us. But do we know what we want from them...aside from selling them more soybeans," asks Luiz Augusto de Castro Neves. In addition to dominating a variety of capital-starved industries across Latin America, China's presence is stirring up concerns ranging from workers' rights to environmental protections. "This isn't a Chinese problem, it's a Brazilian problem," concludes Castro Neves. (O Petróleo


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Chile


The Chilean Fruit Growers Association (Fedefruta) is forecasting a 6.1% increase in Chilean fresh fruit exports this year, despite the growing trade war between the U.S. and China which has hammered another key Chilean export, copper. Former Fedefruta president and current Chilean Ambassador to China, Luis Schmidt, says the numbers are encouraging but cautions, "We still need to get through the spring harvest." So far this year, Chilean cherries and blueberries have posted the largest YOY gains in export sales surging 108% and 30%, respectively, while sales of Chilean avocados and pears are both down 11%. Schmidt says Chile's fruit sector benefits from two large safety blankets: the diversity and stability of export markets and Chile's 27 bilateral trade agreements with countries that together represent 90% of the world's GDP." (Portal Agro Chile)


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Paraguay


Paraguay is categorized as a South American country with a positive outlook for foreign investors, according to a new report from the U.S. State Department. According to La Nación, the annual ranking of over 170 countries describes Paraguay as "an open economy, small but fast-growing (3.5% GDP in 2015, 4% in 2016 and 4.2% in 2017, with a strong demand for manufactured goods from the U.S. and strong growth potential over the next decade." In terms of agriculture, the report says Paraguay is the world's largest exporter of organic sugar, the second-largest producer and exporter of stevia, the sixth-largest producer of soybeans, and the seventh-largest exporter of fresh beef in the world. In addition to a young population and labor pool (50% under age 25), the report says the U.S. is the top country of origin for foreign direct investment (FDI) in Paraguay. (La Nación)


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Uruguay


Uruguay meat exports rose 8% in the first half of 2018 topping US$1 billion, according to new numbers this week from National Meat Institute (INAC). By segment, Uruguay fresh beef exports in 1H18 rose 0.3% in volume and 7% in dollar terms, while Uruguay sheepmeat exports rose by 3% in volume and 17% in revenue. Uruguay beef dominates the country's meat exports accounting for 82% of all revenue. Uruguay's average export price per ton for beef this year is US$3,582 compared to US$3,370 this time last year. The top markets for Uruguay meat exports are China (41% of total), the E.U. (20%), NAFTA (13.8%), Mercosur (7.4%), Israel (5.1%) and Russia (4.5%). This week Uruguay fulfilled its Hilton 481 quota of premium beef exports to the European Union, a development that has local producers perplexed and shifting strategies mid-year. Uruguay unexpectedly met its quarterly quota in only 16 days. (El País)


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