Sagging Indian Soybean Meal Exports to Asia Replaced by China

Exports of Indian soybean meal to Asian markets have declined over the past few years, as growing domestic demand and an export shift to markets in Europe and Iran has reduced available supplies for Asia. This has provided an opportunity for China’s soybean processors to capture sales in these near-by markets. Close proximity to Japan, South Korea, and South East Asia allows China to better compete in short-haul, smaller volume shipments compared to the United States and South America.

In India, this downward trend is expected to continue, as growth in domestic demand is likely to outpace production, which would further reduce export availability. However, because India’s soybean meal is obtained exclusively from locally produced beans, they have a competitive advantage over China’s soybean meal that is mostly produced from imported beans. Therefore, China’s export growth will continue to be highly dependent upon the strength of India’s soybean meal sales to Asia.

OVERVIEW

For 2014/15, global soybean production is up sharply with gains for the United States, Russia, and Ukraine only partly offset by a reduction for India. Global trade is up with stronger imports by China and Egypt, and greater U.S. and Russian exports. Global trade for soybean meal and oil is up slightly. With the forecast record crop and buildup in stocks, U.S. season average farm price is lowered.

For 2013/14, global soybean production is up slightly with a larger crop in Bolivia. World trade is boosted for the EU, Egypt, Turkey, and Indonesia. Exports by Brazil and the United States are also raised. Global soybean meal trade is lower as reductions in Argentina and India more than offset gains in Brazil, China, and the United States. Global soybean oil trade is down slightly. The season average U.S. farm price is lowered.

SOYBEAN PRICES

U.S. export bids, FOB Gulf, in June averaged $562 per ton, down nearly $20 from last month. The seasonal decline is attributed to winding down new sales and prospects for a bumper crop in the fall.

As of the week-ending June 26, U.S. soybean commitments (outstanding sales plus accumulated exports) to China totaled 27.6 million tons compared to 21.5 million a year ago.Total commitments to the world are 45.5 million tons, compared to 36.8 million for the same period last year.

2014/15 TRADE OUTLOOK

• United States

o Soybean exports are up 1.4 million tons to 45.6 million on record supplies and lower prices.

o Soybean meal exports are up 498,000 tons to 10.7 million, and oil exports are up 182,000 tons to 953,000 tons on larger supplies.

• Argentina

o Soybean exports are cut 500,000 tons to 8.5 million on expectations of stronger competition from the United States.

o Sunflowerseed meal exports are lowered 160,000 tons to 280,000 and oil is down 125,000 tons to 375,000 on reduced crush.

• Australia’s rapeseed exports are up 300,000 tons to 2.7 million on larger exportable supplies.

• China’s soybean imports are up 1.0 million tons to 73.0 million on prospects for lower prices.

• Egypt’s soybean imports are up 170,000 tons to 1.9 million on stronger crush.

• India’s soybean meal exports are down 400,000 tons to 3.4 million on lower crush.

• Russia

o Soybean exports are up 100,000 tons to 300,000, while imports are cut 100,000 tons to 700,000 with a record crop forecast.

o Soybean meal exports are up 100,000 tons to 400,000 on expectations of higher crush.

2013/14 TRADE OUTLOOK

• United States

o Soybean exports are up 544,000 tons to 44.1 million on record shipments to date, while imports are cut 136,000 tons to 2.3 million on trade trends.

o Soybean meal exports are up 137,000 tons to 10.6 million on trade to date.

o Rapeseed meal imports are up 179,000 to 3.4 million on stronger use.

• Argentina

o Soybean meal exports are lowered 800,000 tons to 27.0 million on a slower pace.

o Sunflowerseed meal exports are cut 150,000 tons to 250,000, and oil exports are down 170,000 tons to 350,000 on reduced crush.

• Australia’s rapeseed exports are up 300,000 tons to 2.9 million on larger exportable supplies.

• Brazil’s soybean exports are up 250,000 tons to 45.8 million, and soybean meal exports are up 220,000 tons to 14.0 million on trade to date.

• China

o Soybean meal exports are up 400,000 tons to 1.6 million on trade trends.

o Rapeseed imports are up 300,000 tons to a record 4.0 million on continued strong demand for crush. With larger crush, oil imports are cut 150,000 tons to 1.2 million.

• Egypt’s soybean imports are up 200,000 tons to 1.8 million tons with stronger demand for crush.

• European Union

o Soybean imports are up 200,000 tons to 12.7 million on trade to date

o Rapeseed imports are up 150,000 tons to 3.5 million on current trade trends.

• India’s soybean meal exports are down 250,000 tons to 3.1 million as lower production and growing domestic use reduce exportable supplies.

• Indonesia’s soybean imports are up 100,000 tons to a record 2.0 million on the pace of trade.

• Turkey’s soybean imports are up 120,000 tons to 1.3 million, while soybean meal imports are cut 180,000 tons to 920,000 on trade to date.

• Ukraine’s soybean exports are cut 150,000 tons to 1.4 million on trade trends