Soybean production boosts Uruguay’s economy

Uruguay‘s primary activities grew 10.9% y-o-y in 1H2022, driven mainly by increased rice, meat and soybean production.

Uruguay’s real GDP increased 8.0% in the six months ended June 30, 2022, compared to the same period in 2021.

Above all, this increase in real GDP was driven by increases in all sectors of the economy (with the exception of public administration activities), which recovered following the impact of the Covid-19 pandemic during the first half of 2021, despite a slowdown as a result of global inflationary and recessionary concerns and uncertainty surrounding the Ukraine–Russia war.

Soybean production

The primary activities sector includes agriculture, livestock, fishing and mining. Uruguay’s territory consists mainly of vast plains which, together with its temperate climate, make the country very suitable for agriculture and livestock farming.

Globally, Uruguay ranks as the sixth largest exporter of soybeans, with shipments for a customs value of US$897 million in 2021, up 19% year-on-year.

On the other hand, the manufacturing sector grew 4.2% in the first half of 2022, at an annual rate, mainly due to an increase in meat packing, driven by a rise in external demand, as well as an increase in the production of syrups, concentrates, automobiles and fiberboard.

In 2020, primary activities in that country contracted 5.4% compared to 2019, impacted mostly by a decline in soybean production, which was partially offset by a favorable performance of winter crops, higher demand for lumber and an increase in milk collection.

In contrast, in 2021, the sector grew 5.0%, as a result of an increase in livestock, forestry, and grain and oil production, which was partially offset by a reduction in fish production.

In 2021, exports of wheat and milled rice decreased by 18.5%, compared to 2020, while exports of agricultural products, processed meats, leather goods, pulp and paper and motor vehicles increased by 28.2, 57.4, 61.4, 42.5 and 72.1%, respectively, compared to 2020.

In 2021, total imports increased by 36.4% compared to 2020, of which 28.8% represented consumer goods, 56.1% intermediate goods and 15.1% capital goods.