Brazil to be world's top soybean producer in 2018/2019 harvest
The soybean market should be promising for Brazilian exporters in the 2018/2019 harvest. According to a study by the Brazilian government based on data from the United States Department of Agriculture (USDA), Brazil is poised to have the largest harvest on the planet. The trade dispute between China and US is also expected to favour Brazilian sales.
“The Chinese are imposing 25% tariffs on American soybean, so Brazilian soy exports are expected to remain heated next year as we are the only country capable of selling the product and occupying the space left by the US" said Leonardo Amazonas, a soybean market analyst at the National Supply Company (Conab).
In Amazonas' assessment, this scenario is expected to lead to an expansion in soybean acreage in Brazil. The USDA forecast is that the US harvest will reach 117.3 million tons, with Brazilian producing 120.5 million tons. It also estimated world grain production to reach 360 million tons next year.
Despite the USDA's assessment, Conab notes that it is too early to say with absolute conviction that Brazil will have the largest global soybean harvest next year. According to the organisation, it is necessary to understand how the climate will impact the harvest, which starts in September.
China is an important player in this market because, despite producing only 4% of the world's output of the grain, it buys 61.5% of all soybean produced on the planet. The prospect for the incoming harvest is for the Chinese to import around 95 million tons.
Source: Brazilian government, with information from the Ministry of Agriculture