Brazil’s record soybean crop this season will allow the nation to boost exports to China while also increasing domestic soybean processing, according to oilseed lobby Abiove.
Andre Nassar, the chief of Abiove, told Reuters that soybean crop will drive up soybean exports to China, confirming the nation’s status as a key provider of food staples to the Asian country just before a March 26 state visit to China by Brazilian President Luiz Inacio Lula da Silva.
Abiove hopes upcoming meetings involving representatives from both countries can strengthen Sino-Brazil trade ties, and perhaps open up a new market for Brazilian-made products like soymeal, which China uses as livestock feed.
Expectations of a rise in domestic crushing will help make up for a drop in neighboring Argentina, where a drought has partly destroyed soy fields and curtailed the country’s ability to produce soymeal and soyoil at a time of high demand.
“It is an atypical year,” Nassar said about Argentina’s massive drought related agricultural loses and fallout affecting its domestic crushers, which could bolster Brazilian processors.
Brazil is the world’s largest producer and exporter of soybeans. This year, it will harvest around 150 million tonnes on the back of higher yields and area expansions.
Last year, China’s total soybean imports fell for the second consecutive year to around 91 million tonnes, with Brazil accounting for 54.4 million tonnes, a 6% drop due to weaker demand from China’s meat industry and problems with Brazil’s own soy crop, which was hit by drought in 2022.
Record soybean imports by China in the first two months of 2023, however, means demand prospects are good for soy exporters in Brazil.