On average, over the last three marketing years, some 70% of Brazil’s exported soybeans head to China versus a 56% average for the United States. — Reuters
BRAZIL’S 2023 soybean exports have surpassed 100 million tonnes, up at least 16% from 2021’s full-year record, though the world’s leading soybean exporter remains heavily dependent on China.
No. 2 exporter the United States is also reliant on China but to a lesser degree, though US soy exporters have previously experienced the fallout when demand from their top customer fizzles, especially for geopolitical reasons.
However, less dominance from China in US exports affords the United States more variety among its soybean customer base versus Brazil.
On average, over the last three marketing years, some 70% of Brazil’s exported soybeans head to China versus a 56% average for the United States.
China’s share of Brazilian exports first reached 70% in 2011-2012 and topped out at 83% in 2017-2018, which overlapped with the US-China trade war.
These statistics reference local marketing years, which are September-August for the United States and February-January for Brazil, with January 2024 marking the end of 2022-2023.
China accounted for a maximum 62% of US soybean exports in 2011-2012, after having first surpassed the 50% mark in 2008-2009. Only 28% of US shipments went to China in 2018-2019 during the trade war.
Both the United States and Brazil have acknowledged that diversifying their soybean customers would be beneficial, though nearly a third of the world’s annual soybean consumption occurs in China, and China accounts for at least 60% of annual imports.
The No. 2 importer, Mexico, pales in comparison at just 4% of world imports, so the top suppliers have no choice but to riskily place most of their eggs in the basket that is China.
Brazil has been rapidly expanding its soybean crop, though Chinese demand has been somewhat stagnant in recent years.
This could put a snag in Brazil’s soy industry should a “black swan” event occur, like African swine fever spreading through China’s hog herd or a political dispute between Brasilia and Beijing.
Any prolonged easing of Chinese activity in the soybean market could put the oilseed on sale, encouraging countries to step up bean imports and process them domestically versus importing the soy products. This was seen in 2018 when China shunned US beans.
The others
Brazil now exports nearly double the US soybean volume per year, and the two will cover 86% of all soybean shipments this year.
On average, over calendar years 2020 through 2022, China accounted for 53% of US and 70% of Brazilian soybean exports. Mexico was next for US exports at 9%.
Europe, excluding Turkiye, Ukraine and Russia, is Brazilian soybeans’ No. 2 entity, accounting for 10% of exports, and Europe is No. 3 for the United States at 8%.
Between 2020 and 2022, Brazil shipped 25.7 million tonnes of beans to Europe, some 75% more than the United States.
Thailand and Turkey are Nos. 3 and 4 for Brazilian beans at 3% apiece, and Iran and Pakistan fall in next at 2% apiece. These countries plus China and Europe cover 90% of Brazil’s annual exports.
The United States is more diverse in the Nos. 4 through 9 spots, with Egypt accounting for 6% of soybean exports, Japan and Indonesia 4% at apiece, Taiwan at 3%, and Bangladesh and Thailand with 2% each. These plus China, Mexico and Europe cover 90% of US shipments.
In 2020-2022, China’s average Brazilian soybean haul was 56% larger than mid-last decade, though its US one was 2% smaller.
Brazil’s shipments to Europe increased 43% in that time frame versus a 6% increase for US beans. Mexico is helping ratchet up US exports with a six-year volume increase of 45%.
Between January and November 2023, Argentina was Brazil’s second-largest destination for soybeans if Europe is not considered one entity.
However, the four million tonnes of Brazilian beans shipped to Argentina so far this year are incredibly rare and occurred due to a severe Argentine crop failure.
Brazil’s 2023 soybean exports should approach 101.5 million tonnes based on estimations for December.
The United States’ calendar-year record for soybean exports was set in 2020 at 63.65 million tonnes (2.34 billion bushels). — Reuters
Karen Braun is a market analyst for Reuters. Views expressed expressed here are the wiriter’s own.
