Sellers of soymeal and soyoil out of Argentina have lifted offers for nearby loading of the product following an explosion at a joint venture between Bunge and Aceitera General Deheza SA (AGD) that is expected to reduce capacity for several weeks.
Offers for both meal and oil moved 2-3% higher during early morning trade on Wednesday, after Bunge confirmed there was an “incident” at its Terminal 6 Facility at San Lorenzo in the Up River port complex.
While the company declined to say what level of damage occurred at the facility, market and trade sources said the explosion occurred at a drying unit at the 10,000 mt/day crusher.
“No employees were injured and the situation is under control. We will be conducting a detailed investigation of the incident to determine the cause and when we can expect to safely resume operations,” Bunge said in a statement.
Offers for soyoil on a flat price basis rose from $826/mt FOB Up River on Tuesday evening to $846/mt FOB Up River by time of press, an increase of 2.5%.
Meanwhile, offers for soymeal rose to $453/mt from $440/mt on Tuesday, a rise of 3%.
“This is a crazy market, I think there is no demand at these levels,” said one frustrated buyer.
“Soyoil offers are higher, but buyers have yet to follow,” said a second market source based in Buenos Aires.
“This is likely to be bullish soymeal,” said a third market source.
Huge hub
The Up River complex is home to the world’s largest hub of crushers and is the biggest exporter of soyoil and soymeal – accounting for 50% of all global trade in both commodities.
Well-placed sources said the explosion happened at one of two lines, with the second line owned out for maintenance.
The Bunge/AGD plant was not believed to be in operation at the time due to a 24-hour strike at the facility.
“The damage is mostly at the drying facility and not important, so it should not cause great delays (to exports). I think delays would/could be due to security/safety reasons for the people to get back to work,” a fourth Buenos Aires source said.
“It was the toaster at one line in their crushing plant. Port facilities are not affected, nor is the second line. Still assessing damages and not much accuracy on when they will resume operations,” said a fifth source.
While trade sources are estimating repairs to take two months, any reduction in crushing volume is likely to be shorter due to an anticipated increase in capacity at the unaffected second line and an overall excess of capacity at the port complex.
Crush rates in Argentina in September were 6% below five-year averages due to a lack of farmer selling.
