• Reuters cited the European Union (EU) as saying that the EU’s soybean imports from the USA almost quadrupled early in the new marketing year as buyers responded to a sharp drop in prices. As soybean imports from Brazil and Paraguay fell, the USA’s soybean exports to the EU jumped by 283% in the first five weeks of the 2018E/2019F marketing year compared with the same period last year.

• In another development, Reuters reported that Brazilian soybean growers have sped up sales for the current season and next season’s crops. An industry consultant said that sales of soybeans from the 2017/2018E season, which is nearing the end, have reached 84% of production compared with 74% at the same time last year and five-year average of 82%. The consultant estimated that Brazil has sold 99.93mil tonnes of soybeans compared with the production of 119.41mil tonnes in 2017/2018E. Chinese soybean importers have been seeking cargoes from Brazil at a time when the trade normally shifts to the USA due to the different periods of soybean planting.

• According to Reuters also, edible oil traders are sourcing exports of palm oil and other cooking oils to India from neighbouring countries to circumvent India’s import tax hike on the oils. India, Bangladesh and Sri Lanka are among the signatories of the South Asian Free Trade Agreement (SAFTA) that created a free trade zone in South Asia. Two palm oil traders said that they have sold palm olein from Bangladesh to India as a duty-free product under SAFTA. India’s Solvent Extractors Association and the Soybean Processors Association of India have requested the federal government to halt the duty-free imports.

• Xinhua news agency reported that China can reduce its soybean imports by more than 10mil tonnes within a year. Experts said that the lower imports can be achieved by popularizing low-protein feedmeal, increasing imports of soybean meal substitutes and boosting domestic production. An industry expert said that pork output and quality are not affected by lowering the share of protein in animal feed if four specific amino acids can be added at different stages of animal growth. Also, soybean meal is not the only source of protein in animal feed. Meal from rapeseed and sunflower seeds can also be substitutes.

• In a related development, Reuters said that Argentina’s soybean crushers could gain access to China’s soymeal market in the coming months. Argentina will present China with a list of companies seeking permission to export soymeal, which includes all Argentine soybean crushers. An industry player said that selling soymeal to China has always been Argentina’s ambition but this was refused by China. China preferred to buy raw soybeans and crush them domestically.

Source: AmInvest Research - 13 Aug 2018