The Netherlands has rejected at least two Argentinian soybean meal cargoes this month after non-approved genetically modified material was found, threatening to disrupt a major trade flow.
Dutch authorities filed two alerts in April involving cargoes originating from Argentina, the world’s top exporter of soybean meal. The April 14 and 17 notifications cited the presence of unauthorised GMO traits, according to the European Commission website.
The Netherlands is a key gateway for feed imports into the European Union, and disruptions there can ripple across regional supply chains. Additional scrutiny of Argentine cargoes could curb demand from the bloc – the world’s largest soymeal importer – for South American supplies, boosting the appeal of US soybean meal.
Chicago soybean meal futures rallied as much as 3.2 percent on Monday on speculation that the rejection would boost demand for alternative origins. Prices largely held gains Tuesday as traders continue to assess the impact of the trade disruption.
The reports have “triggered some pretty decent buying into meal, (with) meal finishing US$8 to US$9 higher, unwinding the meal oil spread. That spilled over into the soybean complex,” Curt Kimmel, hedging strategist at AgMarket.Net, said on Illinois Public Media’s Closing Market Report.
The EU imports about 20 million tons of soybean meal a year and typically relies on South America for the bulk of supplies, with Brazil and Argentina as the top two sources. Any sustained and unresolved strain on flows could gradually start to alter global trade patterns, given the bloc’s strict regulatory standards.
by Hallie Gu, Bloomberg
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