Forecasts for Brazilian exports of soy complex revised downwards for 2020

The volume and revenue projections for exports of Brazil’s soy complex in 2020 were updated by the DATAGRO consultancy. In it, total shipments were revised to 91.90 million tons compared to 93.60 million tons in the last estimate and 0.1% higher than the volume shipped in 2019 (91.78 million tons), but below the record volume of 101.35 million tons of 2018.

Specific shipments of soybeans in grain were updated by DATAGRO to 74.30 million tons – below the previous survey, but with a 0.3% increase compared to 2019. Forecasts for soybean meal exports are now at 16.70 million tons (a 0.2 % increase), and the volume of soybean oil at 900,000 tons (a 13.5% drop over the previous year).

The cut made in the projection of soy exports was related to the review previously made by DATAGRO for potential soy production in the 2019/20 harvest, which dropped to 121.92 million tons compared to 123.62 million tons from the previous survey. Even so, this is still a 2% increase over the previous harvest which was 119.19 million tons.

“An important factor of uncertainty comes with the impact of African swine flu (PSA) on Chinese demand for soybeans and corn. Due to the slaughter of a large part of the pig herd, the Chinese continue to increase meat imports to meet their demand, generating additional demand for bran and corn in the supplier countries. That is the case in Brazil,” says Flávio Roberto de França Junior, coordinator of DATAGRO Grãos.

France also lists the following factors as points for attention: the impact on the global economy generated by the COVID-19 crisis and its uncertain influence on the demand for food; the climate with the formation of a low-intensity El Niño; the trade war between China and USA, still with no final resolution defined.

The forecast for total revenue fell to US$31.97 billion this year, 2% less than the US$32.63 billion gained at the close of 2019. The analysis takes into account the partially lower average price estimates. “This projection of a mixed price scenario for the market this year, but a predominant threat of drops, is associated with the partial retraction in demand due to the crisis brought about by the new coronavirus”, points out França.

The following chart shows Brazilian soy exports to China and the rest of the world as of January 2015:

Chart source: DataLiner

Source of report: DATAGRO

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