Brazil to increase its share in global soybean trade

Brazil’s share of global soybean trade could increase to 60.6% by 2033, according to a study released last week by the U.S. Department of Agriculture’s Economic Research Service (ERS).

For many years, the United States was the world’s largest soybean exporter, but in 2012-2013, Brazil exported more soybeans than the United States, and since then its share of world soybean trade has increased.

The study, which was conducted from 2017-18 MY to 2021-2022 MY, compared factors such as production costs, profits, and competitiveness that affected soybean exports from the two countries.

The study found that the total cost per bushel of soybeans in the United States exceeded the total cost per bushel of soybeans in Brazil in 2021-2022.

The study notes that improvements in Brazil’s land transportation infrastructure over the past decade have resulted in cost savings per tonne of soybean exports from the main producing state of Mato Grosso through southern ports. The average cost of domestic transportation in the period from 2017-18 MY to 2021-2022 MY decreased to USD 77 per ton compared to USD 98 per ton in the period from 2008-09 to 2012-13.

Exports of Brazilian soybeans from the northern Mato Grosso to Shanghai (China) through the port of Santarém provides savings of USD 25 per ton of land costs compared to exports through the traditional port of Santos in the southern region, the study said.

Brazilian producers had a higher national average profit per bushel over total costs than the United States in 2021-2022 (US$4.05 compared to US$2.13).

The average national profitability per bushel over operating costs for soybeans was highest in the United States in 2021-2022, 16.4% higher than Brazil’s profitability.

The US Midwest was the lowest cost soybean exporter. Parana in Brazil was the next lowest cost exporter, primarily due to its location near a port and low domestic transportation costs.

The Brazilian state of Mato Grosso competes with the United States in soybean exports despite higher domestic transportation costs due to lower soybean production costs.

Brazil, which exports 60% of the soybeans it grows, has become the largest supplier to China and the world’s largest soybean importer.

According to the General Administration of Customs of China, in the first 11 months of 2023, the total volume of soybean supplies from Brazil to China amounted to 64.97 mln tonnes, up 25% year-on-year. According to the data, the total imports of the USA this year decreased by 8% and amounted to 20.36 mln tonnes.

Customs data showed that Brazil shipped 5.2 million tons of soybeans to China in November, up 108% year-on-year. Attractive prices for a record Brazilian soybean crop attracted Chinese buyers during the month, while drought on the Mississippi River and Panama Canal slowed purchases in the United States.

The US Department of Agriculture’s Foreign Agricultural Service predicts that Brazilian soybean exports in the 2023-24 marketing year could reach 100 million tons, more than double the expected shipments to the US.

Tags: Brazil, soybean, crop forecast