Day 7 - Roasario and Buenos Aires, Argentina
Thursday – February 1
We checked out of our hotel and walked 2 blocks to the Argentina Board of Trade. This facility has a trading floor similar to the stock and commodity exchanges of the U.S. Here we met an individual who lectured for about one hour. The following are my notes from this meeting:
Rosario is located in the center of Argentina’s grain production. The Board was founded 116 years ago. It annually handles 15 to 16 million metric tons, mostly soybeans, but also some wheat, corn, and sunflowers. The Buenos Aires grain exchange handles about 11 million metric tons per year.
They analyze 300,000 samples per year. He estimates a big crop of soybeans in South America this year. He stated that U.S. production is expected at 75 million tons; Brazil 35 million tons; Argentina 25 million tons and China 16 million tons.
Most of Argentina soybeans are exported. They produce 64 million tons of soya and export 47 million tons. Transportation within country is mostly by truck and this is a major disadvantage. 60% of wheat, 58% of corn, 97.4% of soybeans and 85.5% of sunflower production is exported. This year’s production is estimated at 25 million tons for soybeans, 16 million tons for wheat, 15 million tons for corn and 4 million tons for sunflowers.
Most of the major crushing plants are north of Rosario on the Parana River. Activities of the Exchange are very high. Plants owned by Dreyfus crush 14% of the soybeans, Cargill 13.5%, Vicntin? 11.8%, Ag Deheza? 13.5%, Bunge 8%. ADM is expected soon. Most of these facilities are on the river. He said that Brazil production area is very dispersed; they have a bigger crushing capacity, but they are more dispersed, older, and inland (disadvantage according to him). Brazil equals 160 million people and consumes 30% to 40% of production. Ports are far from production. Cuiaba is the main producing area.
He said Argentina is the number one exporter of oil and soybean meal. He said they had big profits in 1996-1997, and net profit was 3% of Pampas’s investment. 1999 and 2000 profits are not so good. He said U.S. net is similar to here. 2.5% on assets without government support and 4.5% with government support. He is not worried about U.S. subsidies. In summary, most of the data he gave us is on the Internet. But the conversation and location of the discussion makes me aware that these Argentineans are big time players in the market.
Plane ride #2
We left Rosario at 10 a.m. for the Buenos Aires Airport. It took nearly 30 minutes to reach the outskirts of Rosario. We got on a 4 lane limited access highway similar to U.S. Interstates. We arrived at the Buenos Airport at 2:35 p.m. for our flight to Curitiba Brazil. The airport terminal is similar to a typical U.S. terminal. By the time we checked our baggage, got through security and customs it was 3:20 p.m.
Plane ride #3 We landed in Porto Alegre Brazil, a city in the far southeast corner of Brazil. We cleared through Brazilian customs and boarded a new flight to Curitiba Brazil. Each flight was 40 to 50 minutes. Nice planes, first an F100 and then a Boeing 727. We arrived in the Curitiba airport at 10 p.m. The time in Curitiba was 4 hours faster than Chicago. We checked into our hotel and it was the best we had had so far. One of the things we all began to suffer from was "shipping fever." We were on an extremely heavy travel pace with many 12 to 15 hour days. Some of the group developed colds and congestion and all the other things that go with traveling. We had no real trouble with the water, and in the major cities most of us were not concerned with brushing our teeth with the hotel water. Too much in and out of the heat and then into air-conditioned buses and hotel rooms. By the end of the trip, I think we all knew each other’s aliments more than we really wanted to know. I was originally concerned about mosquitoes and malaria. All of the areas we were in have no malaria carrying mosquitoes. I only saw two mosquitoes while we there. Most health people recommend yellow fever shots. We all survived.