World Grain - August 2018 - 22
Focus on Uruguay
Country finding success as a soybean exporter
by Chris Lyddon
Uruguay is a successful exporter of grains and oilseeds, particularly rice and soybeans. The rice mainly goes to neighboring countries, while China is the major destination for Uruguay's soybeans. A severe drought in 2017-18 cut production
of grains and oilseeds sharply, but a recovery to more normal
levels is expected for 2018-19.
The International Grains Council (IGC) projects Uruguay's
total wheat production at 600,000 tonnes in 2018-19, compared with 400,000 the year before. It is set to import 300,000
tonnes of corn in 2018-19, compared with 400,000 the previous year.
The country is expected to produce an unchanged 900,000
tonnes of rice in 2018-19. Rice exports are forecast at 800,000
tonnes, down from 900,000 the year before.
The IGC projects Uruguay's soybean production in 2018-19
at 3 million tonnes, up from 1.7 million the year before. In 2017-18 the
IGC puts Uruguay's exports of soybeans to China at 600,000 tonnes.
In an annual report on the grains
sector dated April 25, the USDA
attaché in Uruguay also forecast
wheat production at 600,000 tonnes
in 2018-19, compared with 440,000
tonnes the year before, noting that
a stable harvested area of 200,000
the historical average.
"Despite strong future prices ($190 to $200 per
tonne for good quality wheat, December 2018) returns are tight given average yields," the report said.
"Analysts estimate that wheat production costs in
2018-19, close to $600 per hectare, will require roughly 3.5 tonnes per hectare to break even."
The report noted that increasingly soil quality problems
mean that some farmers will plant winter wheat as a soybean
rotation option for weed suppression and erosion control. The
Population: 3,360,148 (July 2017 est.)
Religions: Roman Catholic 47.1%, non-Catholic Christians
11.1%, nondenominational 23.2%, Jewish 0.3%, atheist or
agnostic 17.2%, other 1.1% (2006 est.).
Location: Southern South America, bordering the South
Atlantic Ocean, between Argentina and Brazil.
Government: Presidential republic. Chief of state and
head of government: President Tabare Vazquez (since March
Economy: Uruguay has a free market economy characterized by an export-oriented agricultural sector, a well-educated workforce, and high levels of social spending. Uruguay
has sought to expand trade within the Common Market of
the South (Mercosur) and with non-Mercosur members, and
President Vazquez has maintained his predecessor's mix of
pro-market policies and a strong social safety net. Following financial difficulties in the late 1990s and early 2000s,
Uruguay's economic growth averaged 8% annually during
the period 2004-08. The 2008-09 global financial crisis put
a brake on Uruguay's vigorous growth, which decelerated to
2.6% in 2009. Nevertheless, the country managed to avoid
a recession and keep positive growth rates, mainly through
higher public expenditure and investment; GDP growth
reached 8.9% in 2010 but slowed markedly in the period
2012-16 as a result of a renewed slowdown in the global
economy and in Uruguay's main trade partners and Mercosur counterparts, Argentina and Brazil. Reforms in those
countries should give Uruguay an economic boost. Growth
picked up in 2017.
GDP per capita: $22,400 (2017 est.); inflation: 6.1%
(2017 est.); unemployment: 7.3% (2017 est.).
Currency: Uruguayan pesos (UYU): 31.23 pesos equal 1
U.S. dollar (July 23, 2018).
Exports: $8.976 billion (2017 est.): beef, soybeans, cellulose, rice, wheat, dairy products, wood.
Imports: $8.74 billion (2017 est.): refined oil, crude oil,
passenger and other transportation vehicles, vehicle parts,
Agriculture: 6.2% of GDP and 13% of the labor force.
Internet: Code: .ur; 2,225,075 users.
Source: CIA World Factbook
August 2018 / World Grain / www.World-Grain.com