The low rate of soybean imports to China is increasing the pressure on world prices
According to the General Administration of Statistics of the People’s Republic of China, China imported 7.35 million tons of soybeans in November, which is 14% less than in November 2021. Of these, 3.38 million tons were imported from the United States, and only 2.54 million tons – from Brazil. which is 32.3% less than in November 2021. This is due to a decrease in the profitability of soybean processing in the country against the background of reduced demand due to the spread of covid-19.
In the period from January to November, compared to the same period last year, China reduced soybean imports from Brazil from 56.5 to 51.83 million tons, and from the United States – from 25.2 to 23.01 million tons, which increases the pressure on prices.
As a result of the prolonged drought in the south of Brazil, the local agency Datagro lowered the forecast for soybean production in the country in FY2022/23 by 1.1 million tons to 152.2 million tons, which is almost in line with the USDA forecast of 152 million tons, so it is not taken into account by traders. We will remind that compared to the previous season, Brazil increased the area of soybean sowing by 5.8% from 41.5 to 43.9 million hectares, so the harvest will significantly exceed last year’s 125.6 million tons.
January soybean futures on the Chicago Stock Exchange have been trading at $544/t for two weeks, adding 3.5% for the month amid a drought in Argentina.
In Ukraine, purchase prices for GMO soybeans remain stable at UAH 13,500-14,500/t, and for non-GMO soybeans at UAH 15,000-16,000/t with delivery to the factory. The export demand for soybeans from the EU countries is decreasing as the prices of rapeseed and sunflower fall, so the prices for soybeans with GMOs decreased to $450-470/t, for soybeans without GMOs – to $500-530/t with delivery to Poland. Romania or Hungary.
In the current season, world soybean production will exceed last year’s by 10%, which will increase pressure on prices. If the weather in Argentina improves in December and January, then in February we should expect another wave of demand reduction against the backdrop of increased supplies from Brazil and Argentina.
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