May 5, 2005

Brazil soybean stocks higher than usual

Brazil's soybean stocks at harvest time this year were higher than normal, largely due to farmers' refusal to sell their product at current market prices, which are lower than last year.

Stocks, however, may be drawn down dramatically during the year due to a smaller than expected crop, growing domestic use (including shortages at Brazilian crushing plants) and strong exports. 

According to a USDA report, soybean exports are expected to increase significantly this year from 19.2 to 23.4 tonnes, due to increased production, greater exportable supply, and continued strong global demand for soybeans and meal. 

Brazil is home to 243,000 soybean producers in 17 states. About 20 percent of the country's total agricultural income comes from soybean.  Of the US$10 billion in total exports last year, soybeans made up 12 percent.

The evolution of soybean crop production has brought about improvement in the standard of living and the development of infrastructure in the areas of transport, education, and health. Brazil is 3-5 years away from being the No.1 global producer of soybean, said the USDA report.