MercoPress. South Atlantic News Agency

Brazilian soybean crop down 10m tons from last year's record but processing plants anticipate a good year

If the soybean export estimate is confirmed, the drop in volume from the 2021 record would be almost 10%

Despite a reduction of 10.5 million tons from the original estimate, leaving total production well off the record of 138.8 million tons from 2021, the Brazilian Association of Vegetable Oil Industry did not change its processing forecast for this year, which is projected at 48 million tons 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 US competitors registered a considerable number of sales at the start of the year, taking advantage of the lower Brazilian supply.

Brazilian companies are dealing with a tense scene in terms of soybean exports, in effect, 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 for 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.

The volume of grains stored at the end of 2022 was estimated at 1.9 million tons, the lowest 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 commodities and by-products prices to significantly increase while at the same time generating good margins for local industries to export.

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

Abiove maintains its estimate for soybean bran exports from Brazil at a record 18.3 million tons, up more than one million tons from the previous season, while overseas shipments of soybean oil will reach 1.7 million tons, 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,” Amaral underlined.