Argentina is planning to buy soybeans from the USA for the first time in two years due to falling prices, an analyst said.

Argentina, the largest country exporting processed soybean meal and oil, is planning to buy whole beans from the U.S. for the first time since 2019. This is due to the drop in prices of American products, making them the most affordable in the world.

Data from the U.S. Department of Agriculture shows that the South American country purchased 88,400 metric tons of beans for this season. This happened during the record harvest in the U.S.

"I was literally amazed by this," said John Bayes, an independent analyst who also collaborates with the U.S. Soybean Export Council.

For example, the cost of shipping soybeans from New Orleans to the U.S. in October was around $395 per ton on a free-on-board basis, which is $16 per ton cheaper than Argentine soybeans, according to Commodity3 data.

Oil extraction plants in Argentina, such as Viterra Inc., owned by Glencore, Cargill Inc., and Louis Dreyfus Co., are often in a state of idleness. This occurred after industrial expansion in the last two decades, which outpaced agricultural production growth. Producers are dealing with high taxes and strong currency fluctuations.

According to the Rosario Board of Trade, local soy producers usually supplement their supply with goods from neighboring countries, mainly Paraguay and Brazil. Import volumes are particularly high this season.

A limited level of water in the Paraguay River has led to a decrease in bean shipments by barges to Argentina. Perhaps this is why the decision was made to purchase American soybeans. It is also possible that there was a misunderstanding in the reports from the U.S. Department of Agriculture, Bayes said. Local Argentine soy shipments have also slowed down after the end of the harvest season in June.

On Monday, the U.S. Department of Agriculture stated that the deal is under review and all necessary corrections will be made to the export sales report from September 19.