The US International Agricultural Service published a new analysis of the soybean market and made a forecast of the world’s cultural reserves for the coming agricultural season. Soybean production is expected to grow to 107.2 million tons. Last year, the figures amounted to 98.6 million tons. The price of products has also changed. In the previous season, a ton of legumes cost an average of $ 420, meal – $ 460, and in this – dropped to $ 340-360 per ton of soybeans, the meal fell to $ 320-340.
What factors influence the world’s production of soybean
The trade war between the United States and China leads to changes in the global market. This is also observed in the cost of soybean meal, which, compared with the previous year, decreased by $ 100 per ton. The confrontation of states led to a surplus. Now the US has large reserves of legumes. For comparison: last year there were 11.9 million tons in the country, and this year – 4.5 million tons.
Tensions in relations between China and the United States caused increased competition in the market. South America is the leader now, but that may change, as the effects of a trade war are unknown. The Chinese market is attractive to many because of its size. Import of soybeans is important for the country – feed products are produced from its processing.
Previously, products were supplied by the United States, but now almost all purchases are made from Brazil. Despite the fact that the Chinese market is the largest, its volumes have declined. The epidemic of African swine fever has led to a decrease in livestock numbers, and the demand for soybean as the main component of animal feed has decreased. As a result, global cultural reserves increase, supply exceeds demand.
Trade relations between countries are constantly changing, the heads of state are trying to agree. Proof of this is new shipments from the USA to China. The meeting of the heads of state to resolve the situation on the world market is scheduled for the near future, but it is questionable.
America sent part of its reserves to Vietnam and Indonesia, which led to a shift in the leadership of Argentina, which was the main supplier in these countries. As a result of such rearrangements, a significant decrease in exports from Argentina is predicted. Usually, the export of soybean meal and soybean oil is 42 million tons, the next year, 35 million tons are expected. Export of soybeans from this country, on the contrary, will increase from 10.5 million tons to 16 million tons next season.
The world’s production of soybean is undergoing changes, both in terms of markets and pricing policy. But the situation may change significantly in the near future, so you should keep your finger on the pulse and follow the trends.