January 3, 2023

 

Brazil soybean exports likely to soar backed by all-time high harvest

Brazilian government agencies and commodity analysts said Brazil, the world's largest soybean supplier, is expected to reach a record trading volume in marketing year 2022-23 (January-December 2023) due to an all-time high harvest forecast, likely alleviating supply concerns for 2022, Hellenic Shipping News reported.

 

Brazil is expected to export 96.6 million metric tonnes of soybeans in MY 2022-23, up 18 million metric tonnes  from the previous year, according to the national agricultural supply company Conab on December 8. Total domestic crush is expected to be 4.5% higher than last year, at 50.68 million metric tonnes.

 

Other major agricultural associations and consultancies have all expressed their support for Brazil's historic trade prospects in MY 2022-23.

 

The Brazilian Vegetable Oils Producers Association said the country is expected to ship 93 million metric tonnes and crush 52.5 million metric tonnes in MY 2022-23, while the US Department of Agriculture (USDA) projects 89.5 million metric tonnes in exports and 51.75 million metric tonnes in crush.

 

According to the USDA, the forecast is based on increased expectations of ample supplies and a favourable exchange rate. The Brazilian real is expected to trade at around BAR 5 to the US dollar in 2023, according to the market.

 

Brazil implemented a floating exchange rate in early 1999, resulting in a significant depreciation of the Brazilian real. Since then, Brazil's agricultural products, such as soybeans and corn, have been competitively priced in comparison to its main rival, the US..

 

Commodity analysts said Brazil's soybean shipments are expected to reach an all-time high next year due to rising Chinese demand.

 

According to a survey of major crushers and traders conducted by S&P Global Commodity Insights, the world's largest soybean purchaser is expected to import up to 98 million metric tonnes of the soybean in calendar year 2023, an increase of 8.3% over the previous year.

 

Brazil has recently surpassed the US as the largest soybean supplier to China, and analysts predict that Brazilian oilseed will oversupply Chinese markets by 2023.

 

Terry Reilly, senior grain and oilseeds analyst at Futures International, said China is expected to buy 61.7 million metric tonnes of Brazilian soybeans in MY 2022-23, a 9% increase from the previous year. Only 28.4 million metric tonnes will be exported from the US to China, a 5% decrease year-on-year.

 

With over 152 million metric tonnes of Brazilian beans expected to flood the market in 2023, the South American country has a significant numerical advantage over US farmers, who recently completed their harvest of 118.3 million metric tonnes in MY 2022-23.

 

China typically imports 60% of its soybean needs from Brazil and 33% from the US.

 

-      Hellenic Shipping News