Javier Preciado Patiño, consultant: 'A 12-year streak of no new soybean investments is broken'

Molinos Agro and the Asociación de Cooperativas Argentinas (ACA) are investing more than $500 million in a new soybean processing plant in Timbúes, Santa Fe. This significant investment marks the return of large-scale capital to Argentina's primary export hub after a 12-year hiatus and reopens a critical discussion about the soybean sector's performance.

For years, soybeans were a key driver of Argentina's agricultural economy. However, the crop lost both land area and production to corn, largely due to the impact of export taxes. The new industrial plant will have the capacity to process 15,000 tons daily, equivalent to an annual consumption of nearly five million tons. Company reports indicate this expansion is driven by expectations of increased soybean supply, spurred by a gradual reduction in export taxes scheduled to begin in January 2027.

Javier Preciado Patiño, a consultant in the grain market, views this investment as more than just a new industrial project. He sees it as the first indication of a trend reversal after more than a decade without significant expansions in processing capacity. "This breaks a 12-year streak of no new investments in the soybean complex," he highlighted.

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This breaks a 12-year streak of no new investments in the soybean complex.

Preciado Patiño emphasizes that understanding the soybean complex's current state requires looking beyond isolated export tax figures. The crucial factor, he argues, is the differential that has long existed between soybeans and corn, the primary competitor for agricultural land. "We must analyze not just the reduction of soybean export taxes per se, but in relation to the export taxes on corn, the main summer crop that competes for land use with the oilseed," he explained.

Historically, the century began with soybean production around 30 million tons. The following 15 years saw the crop's greatest expansion, reaching 61.4 million tons in the 2014/15 season. This period coincided with the construction of new industrial plants capable of processing 47,000 tons daily, or 15.5 million tons annually. However, this growth trajectory was interrupted, and production began to decline, partly due to droughts, settling at its current levels.

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We must analyze not just the reduction of soybean export taxes per se, but in relation to the export taxes on corn, the main summer crop that competes for land use with the oilseed.