by PressUSDA: China’s demand for soybeans is low
How low demand for soybeans in China will affect the soybean cultivation in Brazil
Since the 2000s, China has become one of the largest importers of soybeans in the global agricultural market. Interest in the crop has encouraged exporters in American continent to increase soybean production. However, USDA analysts expect low demand for soybeans from China in the 2023-2024 MY. At the same time, one of the major suppliers, Brazil, is increasing production. This situation will lead to a significant increase in stocks of the crop. Stocks are forecast to reach record levels around mid-2024.
In the first half of 2023, soybean values have fallen below the levels of the last two years. Brazilian farmers will have to rethink their plans for growing the oilseed crop. Experts believe in it if this dynamic continues. Producers will also have to rely on demand from large importers, especially China.
World leaders in soybean production
In 2023, Brazil will harvest around 155 million tonnes of soybeans. An increase of 11% compared to the previous period. It should be noted that until 2017 the country’s harvest did not exceed 100 million tonnes. While in 2024, production is forecast to reach 163 million tonnes. It will be a new record. Analysts predict that in the current economic climate, the profitability of soybean production in Brazil could fall back to the levels of the 2010s. At that time, soybean acreage was growing at less than 3% per year. Compared with an average of 4.5%.
Brazilian producers are not selling last season’s crop. Because soybean prices falling. They want to wait for higher prices. The situation is similar for this year’s soybeans. Only 9% of stocks were sold in the first 5 months of 2023. It is believed to be the lowest level in the last 5 years.
The second largest exporter of soybeans is the USA. Farmers there plan to produce nearly 123 million tonnes in the 2023-2024 marketing year. Argentina, another major producer in the region, is expected to finally reach average yields after a drought that almost halved last season’s production. Experts believe the three leading soybean suppliers could increase global production by around 11%. As a result, the 2023-2024 MY will see the largest crop rise in the last 7 years.
The volume of soybean imports by China in the 2023-24 will be 100 million tonnes. In the previous period, the figure was 98 million tonnes. However, in this case it is important to take into account the significant increase in global production. Demand for soybeans will increase by 4.7% in the Chinese market and by almost 6% worldwide.