Brazil may become the world’s largest exporter of soybean meal in 2022/23

Brazil is expected to increase exports of soybean meal in 2022/23 season, becoming the world’s largest supplier of this product and overtaking Argentina, which is currently the first largest supplier of soybean meal to the world market. The last time Brazil was the world’s largest supplier of soybean meal was in 1997/98.

Thus, export premiums for soybeans in Brazil continue to grow, which indicates higher prices for long-term contracts. According to Cepea, in the port of Paranagua (PR), the export premium for soybeans for shipment in August/23 was offered at USD 11.00 per short ton, and demand was at BRL 13.00 per short ton on July 13. Last week, bids were at USD 6.00 per short ton, and requests were at USD 9.00 per short ton.

So, on July 13, the price of soybeans FOB in the port of Paranagua was calculated at 479.06 USD per short ton, which is 4.3% higher in seven days. Consumer caution limited valuations in many regions surveyed by Cepea. However, most agents signaled the need to purchase new batches in the short term.

According to the report released by the USDA on July 12, Brazil exported 12.5 mln tons of soybean meal in the 22/23 season (October 22 – September 23), a record. According to Secex, Brazil exported 15.26 mln tonnes of the product this season (till June 23), which is 71% of the USDA’s total forecast.

The growth of Brazilian exports is due to lower soybean processing in Argentina, which is estimated at 30 million tons, the lowest in the last 18 seasons, and higher demand in the domestic market, which is also projected to be a record at 3.35 million tons. As a result, Argentina’s meal exports are estimated at 21.2 mln tons.

However, according to the US Department of Agriculture, the US is expected to export 12.7 mln tonnes of soybean meal, the highest since 2017/18. Domestic consumption is expected to grow this season as well. It is projected at 35.56 mln tons, which is also a record.

On the demand side, the European Union, the world’s largest importer of soybean meal, is expected to reduce purchases by 4.21% in 2022/23 season to 16 million tons. This is due to their domestic consumption, which may be the lowest since 2012/13. Indonesia, the second largest importer of soybean meal in the world, is estimated to purchase 5.7 mln tons of the product in 22/23, which is a record and 3% higher than in the previous season.

Prices for soybeans increased in Brazil in the first two weeks of July, driven by higher demand on both domestic and international markets. During the period from June 30 to July 14, the ESALQ/BM&FBovespa Paranaguá (PR) index increased by 5.46% to 146.27 Brazilian reais per bag (30.51 USD). On July 14, the CEPEA/ESALQ Paraná index increased by 3.9% to 136.31 Brazilian reais ($28.43) per 60 kg bag.

Tags: Brazil, soybean meal