BUENOS AIRIES, ARGENTINA — Devastated by drought, Argentina’s 2017-18 soybean crop is forecast at 36 million tonnes, a 37% drop from the estimated production at the beginning of the year, according to a Aug. 30 Global Agricultural Information Network (GAIN) report from the U.S. Department of Agriculture.

“Feedback from the harvest progress over the last two months reflected more serious drought damage than initially expected with a national average yield falling 22% to 2.12 tonnes per hectare,” the USDA said. “Only areas in north Buenos Aires, south Santa Fe, and east Cordoba provinces withstood the drought impacts to deliver yields at historic average levels of 2.7 tonnes per hectare or slightly above.”

The report also noted that soybean imports from January to June 2018 were 2.72 million tonnes, more than double last year’s imports for the same period.

Argentina is the world’s third largest soybean producer and the top soybean oil and meal exporter, driven by a crush capacity estimated at 67 million tonnes.

In January 2016, the country lifted a ban on soybean imports to promote greater crush at a time when the processing sector had an under capacity of 30%.

“As a result, over the past two years Argentina imported Paraguayan soybeans, which generally have a higher protein content, to support crush levels and elevate the protein level of soybean meal,” the USDA said.

This year’s lower domestic supplies also led Argentina to seek out supplies from the United States and Brazil, the USDA said.

“Based on the latest import data, it appears evident that imports will continue to grow rapidly for the remainder of the year,” the USDA said. “As such, Post revises its import estimate up to 4.5 million tonnes for 2017-18.”

Because of lower exportable supplies, the USDA revised down 2017-18 exports to 3 million tonnes. Ending stocks were also revised downward to 9.06 million tonnes.