China's Imported Soybean Arrivals Hold Steady in March

Soybean Processing in South America to Increase

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The soybean processing volumes in South America are likely to increase steadily in 2024 due to the recovery of oilseed production in Argentina and the increase of the biodiesel fuel mandate in Brazil, Apkinform reports according to S&P Global Platts.

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According to the estimates of S&P Global Commodity Insights, the total soybean processing in Argentina and Brazil next year will reach about 92.1 mln tonnes in 2024, which is 15.3% higher than in 2023, when the harvest in Argentina was reduced by about half due to the largest drought in the country’s history. Against this background, in 2023 Argentina lost the leading position in soybean meal production to Brazil.

Argentina doubled soybean harvest

In the season-2023/24 (April-March), S&P Global experts forecast the soybean harvest in Argentina at 50.5 mln tonnes, which is more than double compared to 22 mln tonnes in the previous MY.

In Brazil, the mandatory blend of biodiesel in diesel fuel is expected to be introduced, which is currently 12%, and in March is planned to be increased to 14%, as determined by the National Council for Energy Policy (CNPE). Previously, the mandate was planned to increase to 13% from April 2024.

According to market estimates, each percentage point increase in the mandate means an additional demand of about 650 thousand cubic meters of biodiesel per year to meet the regulatory requirements. This should increase domestic consumption of soybean oil, as it accounts for more than 70% of the feedstock used in the Brazilian biodiesel industry.

According to the latest forecasts of S&P Global, in 2023/24 MY (January-December) Brazil is expected to use 5.74 mln tons of soybean oil for biodiesel production, which is 24.6% more than last year. It is also expected that in 2023/24 MY the soybean harvest in Brazil is likely to reach 158 mln tonnes, which is lower than the initial forecast of 167 mln tonnes due to the lack of rains in the main production regions from October to early December.

It is also worth noting that the market expects an increase in purchases of soybean oil by major consumers, such as India and China, which will also increase the processing of the South American oilseed.

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