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Record-Breaking Soybean Production in Brazil

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Jun 28, 2023 | Agricultural Markets News

Reading time: 2 minutes

In 2023, Brazil’s soybean industry is experiencing a landmark year, with record-breaking production and exports on the horizon. As the world’s leading soybean producer, Brazil is projected to harvest a phenomenal 152-153 million metric tons (MMT) of soybeans in the marketing year 2022-23, marking a 20% increase from the previous year.

Interestingly, the industry’s export figures show a diverse market for Brazil’s soybean exports. In May 2023, China, as expected, was the largest importer, with a massive intake of over 12 million tonnes of soybeans. This was followed by Argentina with about 989,256 tonnes, and the Netherlands with 661,602 tonnes. Brazil also supplied significant quantities to countries like Bangladesh, Canada, Colombia, and the Dominican Republic, reflecting its wide export network.

The earlier months of 2023 have also shown promising export volumes. In April 2023, China again emerged as the largest buyer, with an import of over 10 million tonnes. Spain and the Netherlands followed with 723,626 tonnes and 303,903 tonnes, respectively. Even smaller countries like Tunisia and Uruguay imported more than 40,000 tonnes each, according to AgFlow data.

This diverse export market is helping Brazil deal with challenges like oversupply and downward price trends. It’s also fostering robust trade relationships that could serve Brazil well in the future.

The situation in 2023 differs significantly from 2022 when a 10.1% decline to 77 million tonnes was recorded. This bounce-back signals resilience in Brazil’s soybean industry, and the USDA Foreign Agricultural Service has revised its soybean export estimate for Brazil to a record 97 MMT for 2022/23.

However, despite these positive projections, an oversupplied market looms over the industry, with record harvests in Brazil and decent crop yield in the United States, another of the world’s top soybean producers. This supply glut has initiated a downward trend in soybean basis prices since mid-2022, a trend that analysts predict will likely continue as the prospect of a record oilseed harvest in Brazil solidifies.

In conclusion, 2023 is shaping up to be a promising yet challenging year for Brazil’s soybean industry. Navigating the complexities of potential oversupply, maintaining robust export relationships, and catering to increasing domestic demand are crucial in reaping the benefits of this record harvest. The export data from the first half of 2023 shows a robust export network, hinting at a positive outcome. However, the final verdict will depend on the industry’s ability to manage evolving market dynamics throughout the remainder of the year.

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