March 6, 2006

 

ASA Weekly: South Korea rejects some Brazilian soymeal; increased concentration in global soybean production seen

 

 

South Korea rejects some Brazilian soymeal

 

South Korean feed producers have been rejecting low-protein-solubility Brazilian soymeal for failing to reach the required minimum protein levels.

 

Last week, South Korean feed traders reported that local feed makers had rejected one cargo of Brazilian soymeal with low protein solubility and were claiming compensation on another. The protein solubility of soymeal from the two cargoes was below the required 70 percent, making it difficult for animals to digest, traders said.

 

Earlier in February, the Korea Feed Association rejected 55,000 tonnes of Brazilian soymeal from Cargill. The protein solubility of the material, which arrived on Feb 17, was only between 50 and 60 percent, according to South Korean traders.

  

Increased concentration in global soybean production seen

 

Despite continued high energy prices, the Food and Agricultural Policy Research Institute (FAPRI) expects world economic growth to remain strong in the coming decade, at about 3 percent per annum, boosting consumption of vegetable oil, dairy products, and meat in many parts of the world. According to FAPRI, solid commodity prices and a persistently weak US dollar in industrialised trading countries keep US exports strong for the next 10 years.

 

FAPRI continues to foresee greater concentration in soybean production. Argentina, Brazil and the US increase their combined production share from 82 percent to 84 percent of world production. World soybean production could be 277 million tonnes by 2015/16, a 24-percent increase from 2005/06, FAPRI says.

 

The Institute also believes that Brazil will overtake the US as the largest soybean producer and exporter in the world, holding a 34-percent share of world production and a 51-percent share of world trade by 2016. The US share of soybean production and trade could drop to 30 and 27 percent, respectively, if FAPRI's forecast holds true.

 

However, China, the world's largest importer of soybeans, likely will expand its imports from 41 to 52 percent of total world imports by 2015/16, which could be a continued boost to the US soybean sector.

 

FAPRI also reports that new policy developments and rising interest in renewable fuels due to high fossil energy costs are expected to boost ethanol and bio-diesel markets in the US, European Union and Asia. Industry thus expands its use of oilseeds, grains, and sugarcane, and prices are sustained.

 

Established in 1984 by a grant from the Congress, FAPRI is a dual-university research programme with research centres at the Centre for Agricultural and Rural Development at Iowa State University and the Centre for National Food and Agricultural Policy at the University of Missouri-Columbia. FAPRI uses comprehensive data and computer modelling systems to analyse the economic interrelationships of the food and agriculture industry.

  

Johanns and Portman told to secure market access gains at WTO negotiations

 

Sixteen major agricultural commodity groups last week wrote US Trade Representative Rob Portman and USDA Secretary Mike Johanns urging them to lock in meaningful market access gains for each major US commodity before market access details are finalised via WTO negotiations slated to be complete by Apr 30.

 

The American Soybean Association, American Sugar Alliance, National Cattleman's Beef Association, National Corn Growers Association, National Pork Producers Council and other commodity groups, signed the letter.

 

"Our producers will find it difficult to support a final WTO agreement that requires substantial reductions in trade-distorting domestic support for US farmers while allowing our largest and fastest growing competitors in the world to continue or further stimulate their competitive export sectors," the groups wrote.

 

Importantly, the groups said US negotiators should insist that developing countries that have 5 percent or more of the world market share of any commodity or semi-processed product reduce their tariffs and subsidies just like developed countries. Those countries include Brazil and Argentina for soybeans, soybean meal and soybean oil exports; Malaysia and Indonesia for palm oil; Brazil and China for poultry and pork; Argentina, India and Uruguay for beef; Argentina and China for corn; Argentina for wheat; Thailand, India and Pakistan for rice; Brazil and Thailand for sugar; and Brazil for cotton.

 

The groups also focused on exempting certain sensitive products from formula cuts. The letter said that if language does not specify restrictions on how, and to what extent, sensitive products can be designated, "it will be impossible to reach consensus on this issue in the bilateral phase of negotiations".

 

The groups expressed their concern that developing countries will use the special products and the safeguard mechanism against import surges to avoid tariff reductions.

 

U.S. & South America Soybean/Products Balance

 

United States 

Argentina

Brazil

Actual

Estimate

Proj.

Actual

Estimate

Proj.

Actual

Estimate

Proj.

2003/04

2004/05

2005/06

2003/04

2004/05

2005/06

2003/04

2004/05

2005/06

Soybeans

thousand tonnes

 Carryin

4,853

3,059

6,954

1,630

2,046

2,181

3,231

2,453

715

 Production

66,778

85,013

82,820

33,000

39,000

40,500

50,500

51,000

58,500

 Imports

151

152

109

540

530

485

364

400

425

 Crush

41,631

46,160

46,811

25,072

27,800

29,100

29,172

28,175

29,675

 Exports

23,946

30,011

27,759

6,500

9,800

10,000

19,571

22,180

25,750

 Other

3,146

5,099

4,297

1,552

1,795

1,810

2,899

2,783

3,000

 Usage

68,723

81,270

78,867

33,124

39,395

40,910

51,642

53,138

58,425

   Carryout

3,059

6,954

11,016

2,046

2,181

2,256

2,453

715

1,215

Soymeal

thousand tonnes

 Carryin

200

191

155

347

354

560

763

532

200

 Production

32,953

36,938

37,116

19,807

21,806

22,900

22,920

22,200

23,395

 Domestic use

28,590

30,448

31,116

700

850

950

8,784

8,850

9,250

 Net Exports

4,372

6,526

5,928

19,100

20,750

22,050

14,367

13,682

14,050

 Usage

32,962

36,974

37,044

19,800

21,600

23,000

23,151

22,532

23,300

   Carryout

191

155

227

354

560

460

532

200

295

Soybean oil

thousand tonnes

 Carryin

676

488

771

99

74

100

150

93

95

 Production

7,748

8,781

9,011

4,513

5,115

5,354

5,258

5,120

5,371

 Domestic use

7,651

7,910

8,142

140

145

155

2,710

2,848

2,870

 Net exports

285

588

583

4,398

4,944

5,224

2,605

2,270

2,516

 Usage

7,936

8,498

8,725

4,538

5,089

5,379

5,315

5,118

5,386

   Carryout

488

771

1,057

74

100

75

93

95

80

 

USDA Export Sales (tmt) - Week of 23 February 2006

Country

Commodity

New Sales

Accum. Exports

 

Country

Commodity

New Sales

Accum. Exports

Barbados

Soybeans

2

7.7

 

Japan

Soymeal

13.10

169.00

Canada

Soybeans

6.20

150.10

 

Mexico

Soymeal

12.20

591.80

China

Soybeans

250.70

1473.70

 

Morocco

Soymeal

1.00

20.40

Colombia

Soybeans

3.50

91.00

 

Philippines

Soymeal

0.90

245.00

Indonesia

Soybeans

7.50

630.60

 

Salvador

Soymeal

2.80

56.70

Japan

Soybeans

38.90

1456.40

 

Saudi Arabia

Soymeal

22.00

61.00

Mexico

Soybeans

25.40

1731.50

 

Canada

Soyoil

0.10

12.10

Morocco

Soybeans

1.20

167.30

 

Hong Kong

Soyoil

0.10

0.80

Netherlands

Soybeans

3.70

771.70

 

Indonesia

Soyoil

0.10

0.20

Philippines

Soybeans

10.60

55.30

 

Kuwait

Soyoil

0.10

1.10

Taiwan

Soybeans

43.50

1020.50

 

Trinidad

Soyoil

0.10

0.70

Canada

Soymeal

21.30

454.70

 

 

 

 

 

Cuba

Soymeal

1.10

70.10

 

Export Sales Totals (tmt)

Dom. Rep.

Soymeal

9.50

136.50

 

Commodity

Outstanding Sales

Accum. Exports

New Sales

Guatemala

Soymeal

3.50

113.20

 

Soybeans

3,406.20

16,195.80

367.70

Honduras

Soymeal

4.90

60.50

 

Soymeal

1,255.30

2,651.40

91.80

Hong Kong

Soymeal

0.50

9.60

 

Soyoil

87.40

114.60

0.40

 

 

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