Brazil’s Sky-High Soybean Export Prices Reflect Surge in Chinese Demand

16 April 2021

Brazil’s soybean export prices are running more than 40% above average for this time of year despite the country’s near-record harvest. Soaring soybean prices underline China’s extraordinary level of demand for the oilseeds so far in 2021. 

China’s first quarter soybean imports of 19 million tonnes are up 20% from last year, and its soybean crush volume is up 10%. Prices on China’s Dalian exchange suggest strong demand for soybeans could continue in the months ahead, which could squeeze US soybean supplies after the fall harvest. US new crop export sales commitments to China already total 2.9 million tonnes, compared with just 100,000 tonnes this time last year. 

Gro’s Brazil Soybean Yield Forecast Model is pointing to a near-record crop this year. The harvest got off to a late start, but as it ramped up China shifted the bulk of its purchases to Brazil from the US. This typically brings a steep drop in Brazil’s FOB export prices in the first quarter. But that price decline hasn’t occurred this year, as hefty Chinese demand props up soybean prices worldwide. 

Brazil is the world’s No.1 soybean producer and exporter, and is normally the biggest global supplier from March through September. Despite its current unusually high soybean export prices, Brazil is still one of the cheapest sources on an FOB basis. And China’s soybean crush margins also heavily favor imports from Brazil. Gro users can monitor these important market dynamics on a near-real-time basis to anticipate shifts in Chinese demand and trade flows. 

This insight was powered by the Gro platform, which enables better and faster decisions about factors affecting the entire global agricultural ecosystem. Gro organizes over 40,000 datasets from sources around the world into a unified ontology, which allows users to derive valuable insights such as this one. You can explore the data available on Gro with a free account, or please get in touch if you would like to learn more about a specific crop, region, or business issue.

 

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