Buying power of soybeans against glyphosate falls by 137% in Argentina

Date:02-07-2022

With strong inflation in input prices, the purchasing power of Argentine soy producers against glyphosate ended the year 2021 falling by 137%.

Despite a slight improvement in December, the ratio of agricultural commodities to fertilizers and herbicides is far from the average of the last eight years.

In the last month of last year, the increase in average soybean prices allowed its relationship with glyphosate to decrease slightly, now passing to 4.03 points. On average over the last eight years, this ratio has been 1.72 points. This was also because the input did not show price variations during December.

In January 2022, the purchasing power of soybeans, wheat, and corn recovered in relation to the main inputs. The market analysis team of the Argentine consultancy Fyo (Futures and Options) updated the input-output ratio for soybeans, wheat and corn, noting that there was an improvement in the purchasing power of grains.

According to market analysts, the calculation of Input/Output ratios is based on the current dollar prices of inputs and the average price recorded during January on the Matba-Rofex futures contract trading platform.

“The local market followed part of the price increases that [the Chicago Stock Exchange] experienced amid the uncertainty generated by the climate impact on South American crops. During January, these increases made it possible to improve the different ratios compared to the previous month, although the generality remains well above their historical averages,” the Fyo report highlighted.

In the case of soybeans, its relationship with glyphosate continues to decline, driven by oilseed prices, since the price of the input has not changed in recent months. The glyphosate/soybean ratio improved again during January. The weather factor in South America boosted the average oilseed prices, while the input has kept its price unchanged since November. The index stands at 3.78 points and remains well above the average of 1.72 points.

(Editing by Leonardo Gottems, reporter for AgroPages)