September 21, 2023

 

Brazil's September soybean exports surge 36% on year amid strong trade momentum

 

Data from Brazil's foreign trade department, Secex showed that strong demand from China and competitive pricing have driven Brazil's soybean exports to 3.5 million metric tonnes (MT) from September 1-18, marking a 36% increase compared to the previous year, S&P Global reported.

 

From January to August this year, Brazil exported a total of 80.85 million MT of soybeans, signifying a substantial 21.6% increase year-on-year. Notably, China accounted for the majority of these shipments, making up 70.1% of the total exports during this period.

 

Between March and early July, Brazilian soybeans were offered at a considerable discount of nearly US$40/MT compared to US soybeans. This pricing advantage drove a significant year-on-year surge in exports.

 

Recently, US soybean basis prices have become more competitive as the September harvest approaches.

 

With Brazil's strong export momentum in September, the country is on track to surpass last year's monthly volume of 4 million MT. Brazil has consistently exceeded last year's monthly export figures since March, indicating sustained demand for its soybeans.

 

Brazil's soybean exports experienced a sluggish start to the year due to a slow harvest. However, they surged starting in March, supported by record supplies and robust demand.

 

Cumulatively, Brazil exported 6 million MT of soybeans in January and February, marking a 31% decrease year-on-year. Yet, from March onwards, export volumes began to rise. In April, exports increased by 25% year-on-year to reach 14.34 million MT.

 

May saw a further 9% increase compared to the previous month, with 15.6 million MT of soybeans exported. June recorded a 39% year-on-year surge to 13.87 million MT.

 

July maintained the export momentum, with 9.9 million MT of soybeans shipped, marking a 32% increase from the previous year. August continued the trend with 8.6 million MT exported, representing a substantial 45% year-on-year increase. The majority of these shipments headed for China, the world's leading soybean importer.

 

Steady demand from China and supply challenges in drought-affected Argentina suggest that Brazil is set for substantial exports in the 2022-23 marketing year (January-December 2023).

 

According to estimates from the Brazilian national supply company CONAB, Brazil is projected to produce a record-breaking 154.6 million MT in MY 2022-23 and export an all-time high of 97 million MT, a 25% increase year-on-year.

 

Some local commodity consultancies are even forecasting that Brazil's soybean exports in MY 2022-23 could surpass 97 million MT, given production difficulties in the US and the drying of the Mississippi River.

 

-      S&P Global