November 12, 2009
 
South American soy takes centre stage as Asian feed consumers look to 2010's harvest

 

 

According to the Food and Agriculture Organisation (FAO), there is a heavy reliance on bumper soy harvests in Argentina and Brazil for early 2010's animal feed worldwide, particularly in Asia.

 

''Really only that crop will allow us from March onwards to talk about ample, sufficient supplies,'' Peter Thoenes, a senior economist at the organisation known as the FAO, said in an interview in Santiago on November 6.

 

Rising fertiliser prices may reduce yields in Brazil as farmers seek to cut costs, according to Thoenes. In Argentina rain is needed to replenish soil moisture after the country suffered its worst drought in a century earlier this year, the Buenos Aires Cereals Exchange said November 4.

 

Damage to South America's crop would have ''price repercussions,'' boosting the cost of the oilseed used to feed pigs and chickens in Asian countries, which would have significant detrimental effects given the livestock industry is still recovering 2009's battering. South America's crop is collected in January.

 

Soy demand will increase next year as a upswing in the global economy boosts use in emerging countries for livestock. The demand for soy will also increase as the US enforce new rules to blend vegetable oils with diesel, according to FAO.

 

Brazil and Argentina are the world's biggest soy producers after the U.S. Paraguay, which neighbours the two countries, is the world's fourth-largest exporter.