November 26, 2011
Soy, soymeal trade grows amid lower US harvest
Soy global trade is seen to rise 5.1% to a record 95.9 million tonnes in the marketing year that began October 1 amid a drop in US output.
This is brought about by strong demand in countries such as China and Vietnam and aggressive sales from South America, the International Grains Council (IGC) said Friday (Nov 25).
Production is set to fall mainly because of lower output in the world's biggest exporter, the US. In fact, Brazil may even surpass the US in soy exports.
Traditionally during this time of the season US sales are brisk, in tandem with its harvest, but the IGC said this time sales have progressed at an exceptionally slow pace and are a one-third lower than year-earlier.
Apart from weak crushing margins in China, large South American availabilities are also a key factor in damping US sales, IGC noted.
Brazil is heading for a second successive year of bumper soy crop, of more than 72 million tonnes. The country's exports may rise 23% this year to 36.8 million tonnes, IGC said. It said Argentina soy exports may rise 30% to 12 million tonnes. Ukraine's soy shipments have hit one million tonnes last year and may rise further.
These sales will ensure ample global supply, though US output and exports are forecast to fall 8.5% and 10.4% respectively.
China's soy imports may rise 9% to a record 57 million tonnes, boosted by its rapidly expanding domestic animal feed sector, it said.
In Vietnam, due to the setting up of greenfield crushing capacity, soy imports may rise 50% to 1.2 million tonnes. However, there will be a corresponding decline in imports of soymeal by 11.5% to 2.3 million tonnes.
Global trade in soymeal is also projected at a record, around 60.2 million tonnes, up 6.7% on year. As output recovers, Argentina's soymeal exports will jump up 19% to 30 million tonnes.
Despite lower purchases by Vietnam, overall soymeal imports by East Asia may rise 7.8% to 16.5 million tonnes, due to higher purchases by Indonesia and Thailand.
EU soymeal imports are forecast at 23.3 million tonnes, up 4% on year due to lesser availability of rapeseed, which is estimated to have declined 7.4% in 2011-12. The region will also have to import more rapeseed, mostly from Australia and overall shipments may rise by 19%.