Soybean Trade Growth: A Story of Brazil, the United States, and China
Over the past 2 years, global soybean exports have risen 20 million tons, supplied exclusively from Brazil and the United States. This pattern of export growth reflects the dominance of both countries in production and trade as well as the buying patterns in China which accounts for nearly two-thirds of global soybean trade. The share of export growth captured by Brazil and the United States varies from year to year depending on relative prices and the quantity of exportable supplies. Over the past 5 years, Brazil has captured a greater share of global export growth, 49 percent versus 40 percent for the United States. This trend reflects Brazil’s larger production growth and smaller domestic market for soybean products. On the demand side, China remains the driver in soybean trade based entirely on the magnitude of its consumption. With that said, growth in demand in markets outside China and the EU have also been strong on a percentage basis. Increased supplies of rapeseed, sunflowerseed, and grains in the EU have slowed the demand for imported soybeans in recent years. Over the next year, USDA’s forecast calls for global soybean demand to continue expanding, with imports rising 5 million tons to nearly 149 million tons. While emerging markets such as Egypt, Pakistan, and Vietnam are forecast to have strong growth in their imports, China is still forecast to account for more than half of the increase in demand, albeit at a slower growth rate. Given the recent trend in exports, it is likely that this increase in global demand will be split between the United States and Brazil, with export shares dependent upon relative availability of supplies in each country.