São Paulo – Brazilian soy exports are expected to go from 54 million tons in the 2014/2015 crop to 55 million tons in the 2015/2016 crop, according to an estimation made by the Brazilian Vegetable Oil Industries Association (Abiove). The demand, which is still high globally, is one of the main reasons for the increase, according to the Market Intelligence director of cereal trading company Cerealpar, Steve Cachia. “The current soy global scenario is marked by an increase in demand, especially in developing countries”, said Cachia.
In mid-December, Abiove revised up its estimate for Brazilian soy beans external sales, which was of 53.8 million tons early in November. The association also estimates higher number of shipments than it expected in November for soybean bran. The product should post exports numbers of 15.4 million tons in the 2015/2016 crop. In turn, soya oil had a lower export estimate, with 1.40 million tons instead of 1.47 million tons.
Cachia reminds that in the last three years there weren’t any climate problems and the prices of soy, considered to be favorable by the producers around the world, caused an increase in planted area and production. Thus, even with the aggressive demand, supply went up in an even faster pace, generating increase in stocks and pressure over prices. “Brazil, as the world’s second largest soy producer and exporter, has an advantage, which is the hike in the exchange rate”, he said, referring to the dollar appreciation, which lends competitiveness to Brazilian soy sales in the global market.
The expert believes that soy prices will continue to be pressured down early next year, but will start to come up a little throughout the year. “The strong demand, climate uncertainty and producers’ dissatisfaction with the current price levels are the main reasons that could support prices”, said Cachia. According to him, some producers could reduce their planted area due to low prices currently being paid for the product.
The Arab market is growing as buyer of Brazilian soy. Data from the Ministry of Development, Industry and Foreign Trade (Mdic) indicates that the region bought 1.1 million tons of Brazilian soy from January to November of this year. There was a 30% increase over the 770,000 tons shipped in the same period of last year. The mains buyers were Egypt, Saudi Arabia and Tunisia.
“The demand for Brazilian soy from Arab countries has also been increasing and should continue to follow this trend in 2016. It reflects an improvement in the purchasing power of some consuming countries in the MENA region (the Middle East and North Africa)”, said Cachia. When the director answered ANBA’s questions, in mid-December, he was on a trip to Malta, in the Mediterranean, for meetings of Cerealpar with representatives of these countries. “The goal is precisely to help in trying to shorten this distance between the Arab countries and the Brazilian market”, he said about the trip and business.
*Translated by Sérgio Kakitani
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