BUENOS AIRES, ARGENTINA — With domestic soybean supplies low due to the recent drought, Argentina has imported more than 3.5 million tonnes of soybeans in 2017-18, a 135% increase over the previous year, according to a Dec. 4 Global Agricultural Information Network (GAIN) report from the U.S. Department of Agriculture.

Local brokers estimate imports could reach up to 5.5 million tonnes by the end of the marketing year, the USDA said.

With the weather improving, the USDA projected 2018-19 soybean production at 56 million tonnes, up substantially from the estimated 36 million tonnes in 2017-18.

“Producers expect a return to normal or average conditions, which will support higher yields,” the USDA said.

Meanwhile, there continues to be an upward trend in soybean exports due in part to the recent elimination of the export tax differential between soybeans and soybean meal and oil.

The USDA said this policy, along with the U.S.-China trade tariff situation, “is discouraging soybean processing and incentivizing greater exports of whole soybeans. As a result, Argentina is importing soybeans for processing from Paraguay, the United States, Brazil, and Uruguay in an effort to reach historic crush levels.”