Strikes in Argentina, in tandem with currency movements, are combining to strengthen the price of soya meal imports into Ireland, according to R & Hall trader Philip Lynch.

“The current strikes at crushing plants in Argentina are serving to reduce the flow of soya meal from that country.

“The market is driven by supply and demand and, as a consequence, the strikes are putting upward pressure on soya prices,” he said.

“Argentina is the sole supplier of soya to the Irish and UK markets. However, the commodity is traded internationally in US dollars.

“Assuming that the price in dollars remains the same, the rule of thumb is that every single point change in the exchange rate between the euro and the dollar puts an extra €3/t on to every consignment arriving in this country.

“For example, the recorded exchange rate movement between the two currencies has seen the euro weaken from a value of US$1.13 to US$1.09 over the past week. This translates into a €12/t increase in Irish soya prices.”

Lynch confirmed that the prospect of bumper soya harvest in the US, Brazil and Argentina may well lead to a weakening of international soya markets later in the year.

“This will not happen until after the US soya harvest is in store,” he said.

“But issues such as the weather in these regions over the coming months, currency movements and strikes must also be factored in.”

Meanwhile Rabobank is predicting a “bearish” outlook for soybean prices.

“We have seen excellent crops in Brazil and Argentina,” said market analyst Carlos Mera.

“In Brazil the devaluation of the real is a huge incentive for the agricultural sector. Argentina may see a deregulation of the exchange rate and the export business in general after the change in government, which may encourage farmers to sell significant stocks of soybean.”