May 28, 2020

 

Global soy production seen to increase 8%

 

Global soybean production in marketing year 2020-21 (October 2020-September 2021) is forecast to surge 8% to 362.8 million tonnes from the 2019-20 estimate. The figure is also 2.5 million tonnes above the 2018-19 record.

 

According to the May 2020 oilseeds report of the US Department of Agriculture's Foreign Agricultural Service, two factors will drive the production increase: a rebound in plantings and yield in the US; and record area forecast in Brazil.

 

Brazil and the US are forecast to account for around two-thirds of global production and over three-quarters of global soybean production growth, the report said in its Soybeans Outlook section. Soybean production in Brazil is forecast to reach a record 131.0 million tonnes.

 

With expanding production, global soybean supplies are seen to reach record levels. Demand, however, will exceed supply growth. Expansion of China's swine herd, recovering from African swine fever, will help boost feed demand and drive both crush and import demand higher.

 

Soybean exports, meanwhile, reached record levels in March and April due to strong early buying from China. This has further encouraged area expansion in the coming year to 38.3 million hectares, the report added.

 

China to account for over half of global consumption

 

China, the USDA said, is projected to account for over half of global consumption growth in 2020-21 and roughly 85% of import growth.

 

Export growth should come from the US as it may be difficult for South American suppliers to fill in export growth forecasts, the report said.

 

Global soybean meal consumption, meanwhile, is projected to rise 4% on growing demand from China, which accounts for nearly 1/3 of global consumption and more than half of growth in consumption.

 

Global meal exports are forecast to grow 1% in 2020-21, with 3/4 of total trade expected to be supplied by South America. Argentina and India are projected to meet most of the growth in trade in 2020-21 with the US and Brazil, due to rising demand, accounting for nearly all of the increase in their meal production.

 

India's meal exports are forecast to reach 1.9 million tonnes, up 420,000 tonnes from 2019-20's depressed level.