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World Soybean Situation 2007
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Global Soybean Report – April 2007
Global soybean production
Soybean trade pattern
Soybean industry issues
Impact on soybean price
• What countries are the global leading soybean producers (including soybean meal and soybean oil) and how they use their production
• What countries are the world major soybean exporters and to where they export most
• What countries are the world major soybean importers and from where they import most
• Brief review on global production drivers of soybean and its derivative products such as harvested area and crushing capacity expansion as well as yield improvement,
• What would be the possible impact of global soybean industrial issues on soybean prices
Global Soybean Report – April 2007
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean productionSoybean
industry issues
Source: FAPRI
• The world was producing more than 228 billion metric tons of soybean last 2006.
• The global production is expected to reach 280 billion metric tons by the next 10 years thanks to persistent production increase in U.S., Brazil, and Argentina that make up 82% of global production.
U.S.
Argentina
Brazil
China
Rest-of-World
0
50,000
100,000
150,000
200,000
250,000
300,000
96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 16/17
projection
Global Soybean Report – April 2007
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean industry issues
U.S.
Argentina
Brazil
China
Rest-of-World
0
40,000
80,000
120,000
160,000
200,000
96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 16/17
U.S.
Argentina
Brazil
China
Rest-of-World
0
10,000
20,000
30,000
40,000
50,000
96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 16/17
Soybean meal production Soybean oil production
projection projection
• China, Brazil, and Argentina would play a pivotal role in the expansion of global soybean meal and soy oil production thanks to countries’ soybean crushing capacity expansion initiated by global companies such as ADM & Cargill.
Source: FAPRI
Global Soybean Report – April 2007
DomesticConsumption(53 billion MT)
Exports(30 billion MT)
Crushed
Not crushed
Soybeanmeal
Oil
Domesticconsumption
Exports
U.S. soybean use 2006
Waste
Domesticconsumption
Exports
• U.S. exported more raw soybean than that of soybean products such as soybean meal and soy oil.
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean industry issues
Global Soybean Report – April 2007
DomesticConsumption(36 billion MT)
Crushed
Not crushed Domesticconsumption
Exports
Argentina soybean use 2006
Exports(7 billion MT)
Soybeanmeal
OilWaste
• By contrast, the most part of Argentine’s export is in the form of soybean meal and soy oil.
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean industry issues
Exports
Domesticconsumptio
n
Global Soybean Report – April 2007
DomesticConsumption(30 billion MT)
Crushed
Not crushed
Exports
Brazil soybean use
Exports(26 billion MT)
OilWaste
Soybeanmeal
DomesticconsumptionExports
Domesticconsumption
• Similar to the U.S., nearly half of raw soybean in Brazil were exported without processing.
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean industry issues
Global Soybean Report – April 2007
24,110 29,937
8,424
25,750
757
7,3506,594
3,473
1996 2006
U.S. Brazil Argentina Other
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean industry issues
8,876
26,45010,557
11,600
6,451
7,893
6,880
4,369
1996 2006
Argentina Brazil U.S. Other
1,993
59151,273
2150
922
681250
847672
980
1996 2006
Argentina Brazil U.S. EU Other
Soybean Soybean meal
Soybean oil
Export volume of soybean and its derivatives (1000 MT)
Source: USDA
• U.S. is currently the largest global supplier of raw soybean.
• Argentina’s soybean meal and soy oil export are dominant in global market.
• Brazil is the second largest supplier of raw soybean and soybean products.
Global Soybean Report – April 2007
China
ChinaChina
Mexico
Japan
Netherlands
Netherlands
SpainItaly
Other
Other
Other
0
5,000
10,000
15,000
20,000
25,000
30,000
U.S. BRAZIL ARGENTINA
mill
ions
MT
China
ChinaIranNetherlands
Other
Other
China
India
India
Korea
KoreaBangladesh
Mexico CanadaOther
0
1,000
2,000
3,000
4,000
5,000
6,000
U.S. BRAZIL ARGENTINA
mill
ions
MT
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean industry issues Spain
Other
Other
Netherlands
Netherlands
ItalyDenmark
FranceGermanyThailand
CanadaMexicoJapanPhilippines
Other
0
5000
10000
15000
20000
25000
U.S. BRAZIL ARGENTINA
mill
ions
MT
Soybean Soybean meal
Soybean oil
Export destination by major exporting countries (2005)
Source: UN Comtrade
• China has become the ultimate raw soybean buyer of U.S, Brazil, and Argentina.
• A large part of soybean meal produced by Brazil & Argentina are exported to Europe.
• China & India are the major soybean oil foreign market for Brazil & Argentina.
Global Soybean Report – April 2007
US
Argentina
Brazil
Other
0
20,000
40,000
60,000
80,000
100,000
2001 2003 2005 2007 2009 2011 2013 2015
1000
MT
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean export by major exporter
Source: USDA
Soybean industry issues
• Brazil is expected to be the largest soybean exporter in the next decade with amount of 62 million MT next 2016/17 and export to grow at 8.5%/year on average.
projection
Global Soybean Report – April 2007
Global soybean production
Soybean trade pattern
Impact on soybean price
Source: USDA
Soybean industry issues
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
2005/06 2007/08 2009/10 2011/12 2013/14 2015/16
Argentina Brazil Other S. America
India United States Other foreign
mill
ion
MT
Soybean derivative product export projection
• Brazil, in combine with Argentina, is also expected to be the leading global supplier of soybean products i.e. soybean meal and soybean oil.
Global Soybean Report – April 2007
2,274
31,50014,572
14,137
5,043
4,050
2,720
3,755
2,632
2,400
8,392
13,370
1996 2006
China EU Japan Mexico Taiwan Other
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean industry issues
Source: USDA
1,8501,674
1,700950
401
7002,694
11,815
235206
1996 2006
India China EU Iran Bangladesh Pakistan Other
11,420
22,680983
2,150
1,104
2,0751,900
3,501
13,628
5,738
1996 2006
EU Thailand Indonesia Mexico China Other
Soybean Soybean meal
Soybean oil
Import volume of soybean and its derivatives (1000 MT)
• The increasing soybean crushing capacity has changed China’s import pattern from importing more soybean meal to importing a large amount of raw soybean.
• EU has become the largest soybean meal importer due to faster-than-production-growth of consumption.
Global Soybean Report – April 2007
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean industry issues
USA
USA
Brazil
Brazil
Argentina
Paraguay CanadaOther
Other
0
5,000
10,000
15,000
20,000
25,000
30,000
CHINA EU
mill
ion
s M
T
Soybean Soybean meal
Soybean oil
Import source by major importing countries (2005)
Source: UN Comtrade
Argentina
Brazil
Argentina
Brazil
UAEUSAOtherOther
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
CHINA INDIA
mill
ion
s M
T
• Major soybean importing countries are mainly supplied by major soybean exporting countries such as U.S., Brazil, and Argentina.
• China, India, and EU are heavily rely on major producers of soybean meal and soy oil in Latin America.
Argentina
Argentina
Brazil
BrazilOther
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
EU THAILAND
mill
ion
s M
T
Global Soybean Report – April 2007
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean import by major importer
Soybean industry issues
EU-25
JapanMexico
China
Taiwan
Other
0
20,000
40,000
60,000
80,000
100,000
2001 2003 2005 2007 2009 2011 2013 2015
1000
MT
Source: USDA
• China is expected to maintain its position as the largest soybean importer on the back of growing meat consumption thanks to country’s healthy economic growth.
projection
Global Soybean Report – April 2007
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
2005/06 2007/08 2009/10 2011/12 2013/14 2015/16
EU Japan SE Asia Latin America
Africa&ME China India Other
mill
ion
MT
Soybean derivative product imports projection
Source: USDA
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean industry issues
• The persistent imbalance between production and consumption growth would create a need for greater EU’s reliance in imported soybean meal.
Global Soybean Report – April 2007
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean industry issues
U.S.
Argentina
Brazil
China
Rest-of-World
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
96/9
798
/99
00/0
102
/03
04/0
506
/07
08/0
910
/11
12/1
314
/15
16/1
7
1,0
00 M
T
• World ending stock for soybean is quite abundant, have increasing trend, and no foreseeable pressure for soy price increase is expected.
World soybeans ending stock
Source: FAPRI
projection
Global Soybean Report – April 2007
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean industry issues
Brazil Factor
Argentina Factor
U.S. Factor
STABLE SOYBEAN
ENDING STOCK
• Harvested area Increased by 86% from 11.8 million ha (1996/7) to 22 million ha (2005/6).
• Yield improvement from 2.43 t/ha in 1998 to 2.67 t/ha in 2006
• Harvested area Increased by 145% from 6.2 million ha (1996/7) to 15.2 million ha (2005/6).
• Yield improvement from 2.45 t/ha in 1998 to 2.78 t/ha in 2006
• Stagnant harvested area• Yield improvement from 2.62 t/ha in
1998 to 2.87 t/ha in 2006
Yield improvement and harvested area expansion in major soybean producing countries are key to stable global soybean ending stock.
Global Soybean Report – April 2007
U.S.
Argentina
Brazil
ChinaIndia
Rest-of-World
0
20,000
40,000
60,000
80,000
100,000
120,000
96/9
798
/99
00/0
102
/03
04/0
506
/07
08/0
910
/11
12/1
314
/15
16/1
7
1,00
0 h
ecta
res
Soybean area harvested
Source: FAPRI
projection
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean industry issues
Global Soybean Report – April 2007
Yield (ton/ha)
Source: calculated from USDA publication
2.622.45 2.43
1.78
1.42
2.872.78
2.67
1.74
1.48
US Argentina Brazil China Other
19982006
• U.S. yield still a bit above those of Argentina and Brazil, with 2.87 ton of soybean produced per hectare in 2006.
• Argentina’s yield is growing fastest due to its monoculture system that require large area (1,000-2,000 hectares).
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean industry issues
Global Soybean Report – April 2007
Feed Use
Food and Other
Ending Stocks
0%
20%
40%
60%
80%
100%
96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 16/17
Crush
Food UseOther Use
Ending Stocks
0%
20%
40%
60%
80%
100%
96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 16/17
Corn use Soybean use
Source: FAPRI
• Corn use for feed and food are currently in competition with ethanol. This has resulted in tight ending stock.
• The case does not apply for soybean as there are no significant alternative use of soybean (like corn for ethanol) resulting in stable ending stock.
projection projection
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean industry issues
• The expected unchanged use pattern of soybean is also a major factor that stabilize global soybean ending stock
Global Soybean Report – April 2007
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean industry issues
Argentina
Brazil
EU-25
Rest-of-World
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
99/0
001
/02
03/0
405
/06
07/0
809
/10
11/1
213
/14
15/1
6
1,0
00 M
T
Source: FAPRI
Soybean meal ending stock Soybean oil ending stock
U.S.
Argentina
BrazilChina
Rest-of-World
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
96/9
798
/99
00/0
102
/03
04/0
506
/07
08/0
910
/11
12/1
314
/15
16/1
7
1,0
00 M
Tprojection projection
• Both soybean meal and oil projections are showing relatively stable ending stock.
• Major soybean oil and meal producer are expected to maintain their productivity level for the next 10 years.
Global Soybean Report – April 2007
Global soybean production
Soybean trade pattern
Impact on soybean price
Soybean industry issues
U.S Crushing Situation• Closures of MNC-owned crushing plants
(±16,000 mt/day) due to low crushing margin.
• Those plants have been gradually relocated to Latin America & China.
• The construction of ±12,000 mt/day of new crushing plant owned by the U.S farmer organizations
Latin America Crushing Situation• Bunge, Cargill, ADM, and Coinbra of Louis
Dreyfus have all significantly expanded their crushing capacities through acquisitions and plant expansions in Brazil, Argentina, and other parts of Latin America
China Crushing Situation• China’s soybean crushing industry has
witnessed the growing large investment in new crushing plants conducted by MNC such as ADM & cargill as well as local Chinese firms.
The stable ending stock of soybean products such as SBM and soy oil can be attributed to the expansion crushing plant in Latin America and China that compensated the decreasing capacity in the U.S
Decreasing
Increasing
Increasing
Global Soybean Report – April 2007
0
200
400
600
800
1,000
1,200
1970 1980 1990 2000 2002 2003 2004 2005 2010 2015
soybeans
soybean meal
soybean oil
US
$/m
tSource: World Bank (2004)
Soybean, soybean meal, and soybean oil long-term price projection (constant 1990 dollars)
projection
Global soybean production
Soybean trade pattern
Soybean industry issues
Impact on soybean price
• Owing to the relatively unchanged soybean use pattern and abundant ending stock, price pressure for soybean is less likely to materialize in the near future.
• This hypothesis is also supported by World Bank’s projection as can be seen at chart above.
For queries please contact:
Ibnu Edy Wiyono & M Ryan Sanjaya
Economic & Business Research
Vice Chairman Office – Charoen Pokphand Indonesia
Email : [email protected]; [email protected]
Phone : 62-21-6919999, Ext. 504/576 Fax : 62-21-6922274