Every year in mid-to-late February, the Office of the Chief Economist of the United States Department of Agriculture (OCE) releases an agricultural outlook report on the next ten years. Based on the global macroeconomics, agricultural productivity and trade policy, the global agricultural supply and demand, trade and prices Estimate the trend of other indicators. This article selects the parts related to the soybean industry in the report just released this year, and looks forward to the industry development trend to 2030.
Macro economic and trade background
In the past few months, the global economy has gradually recovered from the severe damage of the new crown epidemic. Take China as an example. In the first quarter of last year, China’s GDP recorded a negative growth of 6.8%, but with the gradual recovery of production and life, China’s GDP for the whole year of last year still increased by 2.3%, and the total amount exceeded the 100 billion yuan mark. As China’s largest trading partner, the United States expects its GDP in 2021 to exceed the level of 2019, and the recovery speed is two years earlier than previously expected.
In addition, China and the United States signed the first phase of the economic and trade agreement at the beginning of last year, and China pledged to substantially expand its purchases of American agricultural products. Favorable policies have greatly boosted U.S. crop exports to China. Take soybeans as an example. In 2020, US soybean exports to China are close to the record high in 2016. According to data from the U.S. Department of Agriculture, the total amount of soybean exports from the United States to China reached 34.57 million tons in 2020, valued at 14.2 billion U.S. dollars, an increase of 53%and 77%respectively from 2019. With the continued recovery of the overall economy, the reconstruction of Sino-US trade relations, and the increasing global demand for edible vegetable oil and soy feed for livestock and poultry breeding, the global demand for soybeans and soybean products will show an optimistic trend in the next ten years.
Review and outlook of domestic supply, demand and export of US soybeans
In terms of planting area:Affected by adverse weather conditions and Sino-US trade frictions, the soybean planting area in the United States has dropped significantly in 2019/20. However, as the weather conditions gradually return to normal, and driven by strong international market demand, a large part of the land that has not been planted in the past year will be used for planting soybeans (and corn) this year. In 2021/22, the soybean planting area in the United States is expected to expand by 6.9 million acres to 90 million acres, and it is expected to maintain this scale for the next ten years.
Domestic consumption:The domestic demand for soybean meal and soybean oil in the United States will increase steadily, which will promote the continuous increase of domestic soybean crush in the next ten years. During the outlook period, feed prices will remain at a low level, the production capacity of the livestock and poultry industry will continue to increase, and the use of soybean oil in clean energy such as biodiesel will stabilize at historical highs. The soybean oil used for the production of biodiesel is expected to increase. From 8.15 billion pounds in 2021/22 to 8.6 billion pounds at the end of the period, it will meet the annual production needs of more than 1.1 billion gallons of soybean oil-based biodiesel.
Export:In the next ten years, U.S. soybean exports are expected to increase substantially. This is mainly due to the gradual recovery of the overall economy and the increase in demand from China. However, despite the growth in US soybean exports during the outlook period, its share of global soybean exports will decline-from approximately 34%in 2021/22 to 29.5%in 2030/31; During the same period, US soybean meal and soybean oil exports continued to face fierce competition from South America, especially Argentina, which has long been the number one exporter. By 2030/31, the share of Argentina and Brazil in global soybean meal exports will increase to 45%and 25%, respectively, while the share of the United States will fall from 18%to 17%; for soybean oil, by 2030/31 , Argentina will account for 56%of global soybean oil exports, ranking first in the world, while the United States will account for 10%. Although this ratio is much lower than that of Argentina, the United States is still expected to become the world’s second soybean oil exporter. This is because Brazil, another major exporter, will invest more soybean oil in domestic biodiesel production in the next ten years. This move will lower Brazil’s soybean oil exports.
Global trade trends of soybeans and soybean products
With the growth of per capita income in developing countries, urbanization and the development of modern food manufacturing, the global demand for soybean, soybean oil and other edible vegetable oils and protein meal used in livestock and poultry breeding will continue to grow.
In the 10-year outlook, global soybean imports are expected to increase by 26.7%. Among them, China’s demand will become the main driving force of international soybean trade; in the same period, global soybean meal and soybean oil imports will increase by 10.4%and 13.1%, respectively. The EU and India will be the world’s largest soybean meal and soybean oil importers.
In terms of exports, by 2030/31, soybean exports from the United States, Argentina and Brazil will account for most of the total global exports. Brazil will be the top soybean exporter in the world, with exports expected to increase by 36.2%. Argentina will maintain its position as the world’s largest exporter of soybean meal and soybean oil, and its soybean meal and soybean oil will account for 45%and 56%of global exports, respectively.
Global soybean imports
Global soybean exports
During the outlook period, global soybean imports will increase by 46.2 million tons to 219.2 million tons, a growth rate of 26.7%. China’s demand will continue to be the main driving force of the global soybean trade, which accounts for about 79%of the global demand growth. During the outlook period, China’s soybean imports are expected to increase from 103.9 million tons to 140.5 million tons to meet the increasing demand for soybeans from the livestock industry and vegetable oil consumption.
Global soybean exports mainly come from Brazil, the United States and Argentina. By 2030/31, they will account for nearly 90%of the global soybean trade.
In the outlook period, the annual growth rate of soybean planting area in Brazil is expected to exceed 2.5%. By 2030/31, Brazil’s soybean exports are expected to increase by 32.4 million tons to 121.5 million tons, an increase of 36.2%, making the country the number one soybean exporter in the world; during the same period, the US soybean exports are expected to increase from 2021/22 The year’s 59.2 million tons increased to 64.6 million tons, but its share of global soybean exports will decline—from about 34%in 2021/22 to 29.5%in 2030/31; while Argentina’s soybean exports The volume is expected to increase by about 34%to 10.9 million tons, most of which will be sold to China. Although this scale is much lower than Brazil and the United States, Argentina will still be the world’s third-largest soybean exporter.
Global soybean meal import situation
Global soybean meal export situation
The expansion of commercial livestock and poultry production and the increase in the application ratio of modern breeding methods have brought extensive growth in market demand. By 2030/31, global soybean meal trade is expected to increase by 14.5%to 78.9 million tons.
In the outlook period, the EU will remain the world’s largest soybean meal import market. By 2030/31, EU soybean meal imports will increase by 3.7%to 19.4 million tons. At the same time, soybean meal imports in Southeast Asia, North Africa, the Middle East, and Latin America will also increase significantly. This is due to the impact of these regions on livestock feed. Demand continues to grow, and the domestic capacity to expand oil planting is limited. Among them, Southeast Asia will contribute as much as 43.1%to the increase in global soybean meal imports-by 2030/31, the total soybean meal imports of Indonesia, the Philippines, Thailand and Malaysia will increase by 2.7 million tons to 15.3 million tons.
Global soybean meal exports will mainly come from Argentina, Brazil and the United States. By 2030/31, their combined share of global soybean meal exports will be as high as 87%, and the three countries will account for 45%, 25%and 17%in turn.
Argentina’s low production cost of soybeans and its strong processing and shipping infrastructure will help boost its soybean meal exports. In the outlook period, Argentina’s soybean meal exports are expected to increase by 5.4 million tons, reaching 35.4 million tons; by 2030/31, Brazil’s soybean meal exports will increase by about 19%to nearly 20 million tons, which will contribute to the global soybean meal trade. The share increased slightly from about 24%in 2021/22 to about 25%; in the same period, US soybean meal exports are expected to increase by about 10%to 13.6 million tons, and the share of global soybean meal exports will increase from about 18%in 2021/22.%Decreased slightly to about 17%.
Global soybean oil imports
Global soybean oil exports
Driven by the dual demands of the food industry and industrial applications, global soybean oil imports are expected to increase by about 13%during the outlook period, reaching 13.9 million tons by 2030/31. The global vegetable oil trade circulation is dominated by palm oil, and the growth of soybean oil still mainly depends on the competition with palm oil market share.
India is the world’s largest soybean oil importer. In the outlook period, its soybean oil imports are expected to increase by 34%, to 4.4 million tons by 2030/31. The main factors driving the increase in imports of soybean oil in India include the rapid increase in demand for edible oil and the limited expansion potential of its domestic oilseed planting area.
In addition, China’s soybean oil imports are expected to increase to 1.2 million tons by 2021/22, but will fall to 880,000 tons by 2030/31.
Global soybean oil exports mainly come from Argentina, the United States, the European Union and Brazil. In the outlook period, their combined share of global soybean oil exports is expected to reach 74%. Argentina implemented large-scale double-season planting, further adjusted the crop/forage rotation ratio, and expanded arable land to the northwest, which increased the country’s soybean crop yields, thereby boosting its soybean crush. A well-developed soybean crushing industry and a limited domestic soybean oil market make Argentina the world’s largest soybean oil exporter. During the outlook period, its soybean oil exports are expected to increase by 25.8%to 7.8 million tons. By 2030/31, Argentina’s share of global soybean oil exports will reach 56%.