Brazil leads world soybean meal exports so far this year

Brazil leads world soybean meal exports so far this year

For the first time in 26 years, Brazil has displaced Argentina from first place in soybean meal exports.

So far this year, soybean meal exports from Brazil have exceeded the volume shipped from Argentina. In this way, our main trading partner displaces the country as the leading global exporter of soybean meal for the first time since the 1997/98 season.

The record harvest underpins the Brazilian crush and its meal exports, which have grown by almost 7% so far this year. If current market conditions continue, shipment growth is expected to be even higher as the Brazilian soybean season progresses. Brazil’s 2022/23 soybean crop would exceed 163 million tonnes according to the StoneX consultancy, adding more than 30 million tonnes compared to last season.

On the other hand, Argentina’s historic drought has led to a 34% cut in soybean meal shipments so far this year. However, the volume of imports partially cushions the sharp cut in production experienced by the national harvest. In this sense, according to the latest estimate of the Guía Estratégica para el Agro (GEA – BCR), soybean production in 2022/23 will total 20 million tonnes, a decrease of more than 52% compared to the previous season.

Regarding soybean oil, the volume of Argentinean exports is also lower than last year. However, the cut is close to 12%, a lower level than the drops experienced by soybean meal. For its part, Brazil has doubled the accumulated exports it had just two years ago. At that time, Argentinean oil exports were more than 400% higher than Brazilian exports, while Argentina is currently 57% higher than Brazil. In this complex production context, the FOB price of Upriver soybean meal rose 25% from the lows of early June. For its part, oil rose by nearly 20% in the same period. This improved the industry’s equation when analyzing its theoretical margin, although, unfortunately, the virtual paralysis of operations makes it impossible to take advantage of this result.

Among the reasons for the decline in soybean activity is the fact that the complex has been left out of the new Export Increase Programme (PIE IV). Thus, since the end of PIE III on 02nd June and 02nd August, around 2.5 million tonnes of soybeans have been sold on the domestic market, according to SAGyP and SIO granos. This volume is far from the almost 4 million tonnes that were sold in the same period last year. This week’s trading barely exceeded 112,000 tonnes on Thursday. The reduced volume traded in soybeans also explains that out of the last ten trading days we have had six days with estimated prices for soybeans.

Against this backdrop, July 2023 closes as the lowest month of all soybean trading in the historical series (starting in January 2017). Soybean purchases last July fell by 74% compared to the same month last year. Not only that, 6 of the last 7 months of this year show the lowest soybean marketing for each month of the year.


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