China became Mercosur main market for soybean products. Argentina, as well as Brazil Uruguay and Paraguay extend cultivatable surface at the expense of other crops, as threat soil integrity and environmental balance.
China produced a boom in the soybean market by ordering huge imports to feed its population and supply its industry. Chicago's board hit records from time to time in 2003, but can drop dramatically just because a Chinese commercial mission failed to arrive on time. As South America is the world's largest soybean exporter and economies depend mostly on farming activities, the region becomes more and more conditioned by the decisions taken in Beijing, far away from Brussels and Washington.
Argentina is a good example of that. This South American country is world’s third largest soybean producer and perhaps the first exporter. However, largest agricultural corporations that control the huge agricultural market of the fertile "Pampas", began to grow soy for export only ten years ago, when the harvested surface was 5 million hectares. Today, fueled by China purchases, it reaches 13 million and growing.
In 2002, soybean represented a quarter of Argentina's total exports. Most of the harvest -16 million tons- was sold to China and other Asian countries, displacing Mercosur and the European Union as country's main trade partners. As a result of the operations, Argentina obtained $3.2 billion, but utilities were concentrated by a handful of companies that owe lands and control the market.
This year, Argentina's exports jumped 15%, but looking into these figures it comes up that industrial sales went down in the last months. According to official estimations soybean exports represent now 30% of the sales -5% more than in 2002- as China's share went up at the same rate. In July, China alone became Argentina's main trade partner, as exports hit its maximum ever. Two months later, country's sales dropped for the first time since May 2002, just because Beijing stopped purchasing soya. As China is a one-party State, Argentina's economy is now subject to the orders of the Communist Party of that country.
Observers warn that "soy boom" could turn into a serious trouble for Argentina, as farmers replace other traditional crops as wheat and corn to grow soybeans. This product turns land unfertile if not substituted by others in a period of time. On the other hand, companies buy lands to grow soy in virgin areas, dismount forests and threat the environmental balance.
A similar scenario can be seen in other Mercosur countries like Brazil, Uruguay and Paraguay. The Brazilian State of Mato Grosso do Sul extended cultivatable surface 15% this year, threatening an area that holds nearly 30% of planet's terrestrial biodiversity, just to export soybean to China.
As unemployment, poverty and instability threaten region democracies, observers believe that a low diversified economy could deepen crisis. Food exports do not create jobs and, as big companies concentrate land possession, they do not help to build equal societies, they say.
Brazil and Argentina are pushing forward a free trade deal between Mercosur and China, but do not take into account that despite soybean is nutritive for individuals, it does not help to develop sustainable economies.
Hernan Etchaleco, Pravda.RU