China’s Brazilian soybean share falls to 72.8%

Brazil’s largest soybean destination, China, reduced imports from the South American country by 13% to 20.07m tons in the first four months of 2019, from 23.08m tons shipped in the same period last year, according to Cargonave shipping agency. The South American country exported a total of 27.6m tons of soybeans globally between January and April, compared to 29.74m tons year-on-year. China’s share of Brazil’s soybean exports fell to 72.8% in the period, compared to 77.6% in the same period of 2018.

Brazil’s soybean export performance yielded high returns in 2018, as a result of China and the US hurling import tariffs on each other. Brazil’s soybean exports reached a record of 83.6m tons in 2018, according to DatamarNews. Of the total amount of soy shipped from Brazil, 68.8m tons were sent to mainland China, up 15m tons from 2017.

While the US-China trade war is still on, the outbreak of African swine fever in China has negatively affected the Asian country’s demands for animal feed – a soy derivative. The US also sent some of its soybean stocks to China in early 2019 as Washington and China tried to end the trade spat.

On the brighter side, Brazil’s soybean premiums for June rose to US$0.92 per bushel earlier this week, in reaction to the continued trade war and lack of a US-China deal, according to the Center for Studies in Advanced Applied Economics (Cepea). Port premiums at Paranaguá also rose by 10 cents last week from Friday, reaching the highest level since December 7, Cepea said.

#SOJA: Mesmo com baixa externa, preços voltam a subir no BR. https://t.co/EOZiS4XEma pic.twitter.com/rMkaPiyX5M

— Cepea (@CepeaEsalq) May 13, 2019

Commodities consultancy SAFRAS & Mercado raised Brazil’s soybean exports forecast by 3.5% on the March estimate to 72.5m tons for 2018/19 season.

The following DataLiner graph shows Brazil’s soybean export trend to China versus the rest of the world:

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