Abiove reduces its soybean harvest and export forecast while maintaining the expectation of a record processing year

With harvests surpassing 70% of Brazil’s crops, the soybean industry revised the country’s crop to 25.3 million tonnes in 2022, down 7.7% from what had been predicted at the end of January. The effects of the drought will lead to a smaller harvest, according to figures by Abiove.

Despite a reduction of 10.5 million tons in the estimate, leaving production well off the record of 138.8 million tons in 2021, the Brazilian Association of Vegetable Oil Industry did not change its processing forecast for this year, which is projected at 48 million with healthy margins in the manufacture of bran and oil.

However, the expected soybean export was lowered by 9.2 million tons to 77.7 million tons as North American competitors registered a considerable number of sales at the start of the year, taking advantage of the lower Brazilian supply.

Companies are dealing with a tense scene in terms of soybean exports. In fact, a more adverse scenario than previously envisioned. But, looking at the half-full glass of water, Brazilian industry is competitive and sufficiently modern to meet market needs,” said the association’s chief economist, Daniel Furlan Amaral.

Due to the decrease in grain exports, Abiove has reduced its expected revenue generated from shipments (of soybean, bran, and oil), which is currently estimated at US$51.4 billion in 2022, down from US$56.3 billion in January. However, revenue will be at an all-time high, with product prices exceeding 2021, when foreign exchange generated totaled 48 billion dollars.

If the soybean export estimate is confirmed, the drop in volume from the 2021 record would be almost 10%, while processing would grow 0.5% year-on-year, with the country using stocks from last season.

Thus, the volume of grains stored at the end of 2022 was estimated at 1.9 million tons, the lowest level in more than a decade, at least, according to Abiove figures.

Brazil’s soybean harvest will be, according to Abiove, about 20 million tons below initial expectations, making global raw material prices and derivatives hike and leaving good margins for local industries to export.

“Markets for bran and oil products have maintained good margins… maintaining the industry’s ability to retain soybeans to serve the market (with derivatives),” said Amaral.

Abiove maintains its projection for soybean bran exports from Brazil at a record 18.3 million tonnes, up more than 1 million tonnes from the previous season, while overseas shipments of soybean oil will reach 1.7 million tonnes, close to a high last seen in 2012 (1.756 million).

“We established a 1.7 (million) projection, but with an upward bias. It is feasible that we sell more than that because the international market is demanding huge supplies,” he said.

Source: Money Times

To read the full original article, please go to: https://www.moneytimes.com.br/abiove-corta-safra-e-exportacao-de-soja-do-brasil-mas-mantem-processamento-recorde/

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