Introduced in Brazil at the beginning of the 20th century, soybeans started to be cultivated intensively in the southern portion of the country. However, from the 1970s onwards, it was possible to observe an expansion of production in other Brazilian regions, causing the area of soy cultivation to have an accelerated growth in the last four decades, leaving 6.9 million hectares in 1977 , to 35.9 million in 2019, according to data from the National Supply Company (CONAB).

Brazil has high production

   This expansion in the area destined for planting ended up, consequently, reflecting in the growth of production. This situation can be observed in the fact that the amount produced jumped from 12.1 million tons in the 1977 harvest to 115 million tons in the 2019 harvest, according to CONAB data. This context led Brazil to end up becoming one of the main global players in the trade in soy oil, grain and bran. In view of this, Brazilians can currently be characterized as one of the three countries in which 82% of world production is concentrated, according to 2018 data from the United States Department of Agriculture (USDA).

Brazil is one of the world's largest exporters and importers

    One of the main parts of the soy production chain is the production of soy bran, which is extremely used for the composition of animal feed, intended for the nutrition of cattle, poultry and swine. It is mainly consumed by the Chinese, Americans, Brazilians and Europeans. Based on this, it is important to emphasize that China stands out for being the largest producer and exporter of bran in the world, but together with the production of Brazil, USA and Argentina, this volume now comprises about 76% of the world's supply of this product.  

Increase in international demand

 

   From this perspective, it is worth noting that the average growth rates in Brazilian, Chinese and Argentine production have been increasingly intense. A situation that could be generated, for example, thanks to the increase in demand from the main consumers, as in the case of France. Given that, according to data from the Ministry of Economy, a significant part of the soybean meal imported by the French has  origin Brazil, which ended up making it possible for the country to purchase the equivalent of US$ 595 million from Brazilians in 2019. However, as already expressed by the French, there is a desire in the country to replace some of its crops with soy. This situation has just evidenced the trend of expansion of the main competitors in Brazil and an increase in demand. That said, it is recommended that the Brazilian soy producer strengthen its trade relations with countries like China and other complementary economies to the Brazilian economy, and invest significantly in exports.

Importance of an international consultancy

 

   However, for this scenario to become a reality and for producers and traders to have more reliable and assertive results in this process, the assistance of a consultancy is necessary, which can carry out strategic planning and a market study on the international context. As a result, soy meal exports will continue to be strong and grow more and more, thus becoming one of the most profitable trades for the Brazilian economy and for its businessmen.

By Julia Zahary on 03/24/2021

Sources:

https://bit.ly/2QIbY5v

https://bit.ly/3ssdLto

https://bit.ly/3lX1bjy

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Soybean Meal: International Demand Growth