December 17, 2003

World Soybean Production May Fall Further

In Argentina, increased area resulting from planting delays for other crops is more than offset by lower expected yields in the case of soybean. Area coverage for this commercially important oilseed is estimated at 13.6 million hectares. Soybean output is now projected at 36.5 million tons (mt) down from last month's 38 mt.

As a result, world output of major oilseeds is now projected at 245 mt, some 2.5 mt lower from the number estimated last month, as per latest assessment made by the US Department of Agriculture (USDA) in its World Agricultural Supply and Demand Estimates.

In an unusual phenomenon, for the second year in a row, soybean output in the US has declined. The latest estimate shows production for 2003-04 unchanged from last month's figure of 66.7 mt, but considerably down from 74.8 mt in 2002-03 and 78.7 mt a year earlier.

However, year on year, 2003-04 will still witness a significant growth in the production of major oilseeds, up 16 mt from 329 mt produced in 2002-03 following overall improved production of rapeseed, sunflower seed, cottonseed and groundnut.

Production of major vegetable oils for the current year is projected at 100.7 mt (94.3 mt last year) while consumption is rated at 100 mt (95.7 mt) with ending stocks placed slightly higher at 6.5 mt (6.1 mt).

Notwithstanding weather-induced soyabean output hiccups in the US and Argentina, world soy meal production in the current year will reach a record 138.6 mt (131.4 mt) while exports too will register a new high of 48.2 mt (43.9 mt).

While US soy meal exports will fall for the second year in succession to 4.1 mt (5.5 mt), those of Argentina and Brazil will rise. Argentina's soy meal shipments are projected at 19.9 mt (18.4 mt) and that of Brazil 16.5 mt (13.7 mt) for 2003-04.

According to USDA, India will chip in 2.4 mt of exports.  

An USDA official said, "While US soybean crop size has crystallised, production prospects in South America are far from certain. Weather conditions especially in Argentina need to be watched closely as any aberration can potentially impact the already firm market."