Brazil’s soybean export revenues expected to fall by US$8.7bn

According to the Brazilian Vegetable Oil Industry Association’s (Abiove) new estimate, Brazil’s soybean exports are forecast to fall by 18.5% to 68.1m tons in 2019, compared to record shipments in 2018. The latest projection is 2m less in volume compared to estimates made in March. Export revenues per ton are expected to fall by 9.3% to US$360 per ton. Thus the country is projected to earn US$8.7bn less from soybean exports this year when compared with 2018, at US$24.5bn.

The 2018/19 soybean harvest is expected to reach 117.6m tons, down 4.5% compared to the 2017/18 cycle mainly due to an expected reduction in total soy imports by China. Brazil’s Agriculture Minister, Tereza Cristina Dias, has indicated that the Asian nation’s soybean exports are likely to decline in 2019 due to the outbreak of African swine fever which is expected to kill as many as 200m pigs, reducing demand for animal feed made from grains and oilseeds such as soybeans and corn.

The United States Department of Agriculture (USDA) estimates China will import only 88m tons of soybeans in the 2018/19 season, compared to 94.1m tons in the previous season. Global soybean imports are likely to fall 2m tons to a total of 151.2m tons according to the USDA.

However, there may be some light at the end of the tunnel. With President Donald Trump’s new threats to raise tariffs on Chinese imports, Brazil might just have an open window to seize the soybean market once again. That said, Agriculture consultancy firm Safras & Mercado affirms that China’s falling trend of soybean exports will generally continue this year, including other soybean derivatives. Abiove estimates that Brazil’s soybean complex shipment revenues will fall by 25.1% to US$30.7bn in 2019, year-on-year.

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

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