By UKF Team
Last year’s facts at a glance
- The United States was the leading exporter in 2021, with a total export value of USD 28 billion.
- Brazil was the leading producer in 2020, with 122 million metric tonnes produced.
- China was the leading importer in 2021, with a total import value of USD 15.4 billion.
In 2021, the average yearly soybean price increased by 43% year on year to $583 per tonne. Soybean prices are predicted to stay largely constant in 2022, although supply problems are likely to drive up costs.
Because of decreased yields in Brazil, Argentina, Paraguay, China, Canada, Indonesia, Vietnam, and South Africa, global soybean production is predicted to fall 0.6% year on year to 364 million tonnes in 2022. The anticipated gains in output in the United States, the European Union, Uruguay, India, Russia, Ukraine, and Mexico will not entirely balance the drops in other nations.
Even though Brazil, the world’s biggest soybean producer, increased harvested acreage by 4% in 2021, drought cut yields significantly. Brazil’s soybean production is predicted to dip 3% year on year to 134 million tonnes. Brazil imports around 85% of its fertiliser needs, and Russia is a major provider, yet shipping statistics in April 2022 showed Russian fertilisers continuing to arrive in Brazil following Russia’s invasion of Ukraine, despite sanctions.
If fertiliser availability does not hinder soybean area growth and/or good yields, high costs might be a concern. According to IMEA, the variable cost of soybean production for farmers in Mato Grosso, Brazil’s top soybean and corn state, is up 71% year on year. Because of reduced government funding, certain farmers may have trouble obtaining financing.
In September, China was suffering from a short-term soybean meal shortage, with prices of the feed component reaching new highs in several areas. According to statistics from Shanghai JC Intelligence Co., spot prices in the key processing centres of Guangdong and Shandong have risen by as much as 10% this week. The surge might raise feed costs for hog producers and fuel additional increases in pork prices, which Beijing is attempting to calm under inflationary pressures.
Traders are scrambling for soya bean meal, with some claiming that customers who have made orders will not be able to acquire supplies. The major cause of the scarcity is a lack of soybean imports since demand has slowed. China’s soybean imports declined 9% in the first eight months of the year compared to the same period the previous year.
More soybeans supplies are on their way, but it will take some time. Chinese importers have increased their imports of soybeans, particularly from Argentina, in recent weeks. The harvest in the United States is also just getting started, which will help to alleviate supply constraints in the coming months.