Brazil’s soybean production has grown minimally over the last three years. It is expected that Brazil will produce some 101 million metric tons during the 2016/17 year. Similarly, total exports to markets such as China and the European Union are expected to rise because of the lower value of the Brazilian Real as well as the increased demand throughout markets worldwide. This article explores Brazil’s oilseed production and trade in recent years.
Brazil’s Soybean Production and Trade
It is estimated that the total surface area planted and harvested with soybean crops in Brazil was of 32 million hectares in 2014/15. This number went up to more than 33 million hectares by 2015/16 and is expected to almost reach 34 million harvested hectares during the 2016/17 season. Meanwhile, Brazil imported an approximate 325.000 metric tons during 2014/15 and 450.000 metric tons in 2015/16. This substantial increase in imports of some 125.000 tons was mainly due to the poor performance of soybean crops because of unfavorable weather during 2015/16. For the 2016/17 season, soybean imports are expected to rebalance around 325.000 metric tons.
In terms of exports, Brazil has consistently exported about 50% of its soybean production over the last several years. A majority of these Brazilian exports is destined to the Chinese markets, which also consume a substantial amount of the soybean exports from the United States. During the 2014/15 season, Brazil exported some 54.6 million metric tons of soybeans of which 6 million were destined to the EU markets. Likewise, Brazil exported approximately 52 million metric tons in total and 6 million to the EU during 2015/16. In 2016/17, Brazil is expected to export about 57 million metric tons to the international markets and 6.3 million to the EU.
Within the Brazilian markets, only a minimal fraction of the soybean production is sold for direct human consumption as food. On the other hand, over the last several years, a substantial amount of approximately 3 million metric tons yearly has been sold as animal feed. Therefore, most of the domestically consumed soybeans are destined to be processed and crushed for the production of either oil or, to a lesser extent, confectioned into part of a consumer meal additive. The amount of crushed soybeans in Brazil over the last three years has been between 40 and 41 million metric tons. One last sector that accounts for soybean consumption in Brazil is that of reserve stocks. While total reserves were estimated at 1.2 million metric tons during 2014/15, this number has almost doubled to approximately 2.2 million metric tons for 2016/17.
In most large agricultural commodity operations in Brazil, soybean and corn plantations are interchangeable or even rotating. In this regard, farmers often gage the international markets in order to determine what they are going to harvest during any specific season. Therefore, it should be noted that market prices, weather variations, and the standing of the Real in the foreign exchange, heavily influence soybean, as well as corn, production and trade in Brazil. Finally, as is the case with other commodity crops, one of the main producing states in Brazil is Mato Grosso located in the central western region of the country and serving as southern frontier to the Amazon rainforest region.