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Page 1: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

World Soybean Situation 2007

<< Please left-click your mouse or press the spacebar to start >>

Page 2: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

Global soybean production

Soybean trade pattern

Soybean industry issues

Impact on soybean price

• What countries are the global leading soybean producers (including soybean meal and soybean oil) and how they use their production

• What countries are the world major soybean exporters and to where they export most

• What countries are the world major soybean importers and from where they import most

• Brief review on global production drivers of soybean and its derivative products such as harvested area and crushing capacity expansion as well as yield improvement,

• What would be the possible impact of global soybean industrial issues on soybean prices

Page 3: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean productionSoybean

industry issues

Source: FAPRI

• The world was producing more than 228 billion metric tons of soybean last 2006.

• The global production is expected to reach 280 billion metric tons by the next 10 years thanks to persistent production increase in U.S., Brazil, and Argentina that make up 82% of global production.

U.S.

Argentina

Brazil

China

Rest-of-World

0

50,000

100,000

150,000

200,000

250,000

300,000

96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 16/17

projection

Page 4: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean industry issues

U.S.

Argentina

Brazil

China

Rest-of-World

0

40,000

80,000

120,000

160,000

200,000

96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 16/17

U.S.

Argentina

Brazil

China

Rest-of-World

0

10,000

20,000

30,000

40,000

50,000

96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 16/17

Soybean meal production Soybean oil production

projection projection

• China, Brazil, and Argentina would play a pivotal role in the expansion of global soybean meal and soy oil production thanks to countries’ soybean crushing capacity expansion initiated by global companies such as ADM & Cargill.

Source: FAPRI

Page 5: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

DomesticConsumption(53 billion MT)

Exports(30 billion MT)

Crushed

Not crushed

Soybeanmeal

Oil

Domesticconsumption

Exports

U.S. soybean use 2006

Waste

Domesticconsumption

Exports

• U.S. exported more raw soybean than that of soybean products such as soybean meal and soy oil.

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean industry issues

Page 6: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

DomesticConsumption(36 billion MT)

Crushed

Not crushed Domesticconsumption

Exports

Argentina soybean use 2006

Exports(7 billion MT)

Soybeanmeal

OilWaste

• By contrast, the most part of Argentine’s export is in the form of soybean meal and soy oil.

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean industry issues

Exports

Domesticconsumptio

n

Page 7: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

DomesticConsumption(30 billion MT)

Crushed

Not crushed

Exports

Brazil soybean use

Exports(26 billion MT)

OilWaste

Soybeanmeal

DomesticconsumptionExports

Domesticconsumption

• Similar to the U.S., nearly half of raw soybean in Brazil were exported without processing.

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean industry issues

Page 8: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

24,110 29,937

8,424

25,750

757

7,3506,594

3,473

1996 2006

U.S. Brazil Argentina Other

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean industry issues

8,876

26,45010,557

11,600

6,451

7,893

6,880

4,369

1996 2006

Argentina Brazil U.S. Other

1,993

59151,273

2150

922

681250

847672

980

1996 2006

Argentina Brazil U.S. EU Other

Soybean Soybean meal

Soybean oil

Export volume of soybean and its derivatives (1000 MT)

Source: USDA

• U.S. is currently the largest global supplier of raw soybean.

• Argentina’s soybean meal and soy oil export are dominant in global market.

• Brazil is the second largest supplier of raw soybean and soybean products.

Page 9: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

China

ChinaChina

Mexico

Japan

Netherlands

Netherlands

SpainItaly

Other

Other

Other

0

5,000

10,000

15,000

20,000

25,000

30,000

U.S. BRAZIL ARGENTINA

mill

ions

MT

China

ChinaIranNetherlands

Other

Other

China

India

India

Korea

KoreaBangladesh

Mexico CanadaOther

0

1,000

2,000

3,000

4,000

5,000

6,000

U.S. BRAZIL ARGENTINA

mill

ions

MT

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean industry issues Spain

Other

Other

Netherlands

Netherlands

ItalyDenmark

FranceGermanyThailand

CanadaMexicoJapanPhilippines

Other

0

5000

10000

15000

20000

25000

U.S. BRAZIL ARGENTINA

mill

ions

MT

Soybean Soybean meal

Soybean oil

Export destination by major exporting countries (2005)

Source: UN Comtrade

• China has become the ultimate raw soybean buyer of U.S, Brazil, and Argentina.

• A large part of soybean meal produced by Brazil & Argentina are exported to Europe.

• China & India are the major soybean oil foreign market for Brazil & Argentina.

Page 10: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

US

Argentina

Brazil

Other

0

20,000

40,000

60,000

80,000

100,000

2001 2003 2005 2007 2009 2011 2013 2015

1000

MT

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean export by major exporter

Source: USDA

Soybean industry issues

• Brazil is expected to be the largest soybean exporter in the next decade with amount of 62 million MT next 2016/17 and export to grow at 8.5%/year on average.

projection

Page 11: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

Global soybean production

Soybean trade pattern

Impact on soybean price

Source: USDA

Soybean industry issues

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

2005/06 2007/08 2009/10 2011/12 2013/14 2015/16

Argentina Brazil Other S. America

India United States Other foreign

mill

ion

MT

Soybean derivative product export projection

• Brazil, in combine with Argentina, is also expected to be the leading global supplier of soybean products i.e. soybean meal and soybean oil.

Page 12: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

2,274

31,50014,572

14,137

5,043

4,050

2,720

3,755

2,632

2,400

8,392

13,370

1996 2006

China EU Japan Mexico Taiwan Other

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean industry issues

Source: USDA

1,8501,674

1,700950

401

7002,694

11,815

235206

1996 2006

India China EU Iran Bangladesh Pakistan Other

11,420

22,680983

2,150

1,104

2,0751,900

3,501

13,628

5,738

1996 2006

EU Thailand Indonesia Mexico China Other

Soybean Soybean meal

Soybean oil

Import volume of soybean and its derivatives (1000 MT)

• The increasing soybean crushing capacity has changed China’s import pattern from importing more soybean meal to importing a large amount of raw soybean.

• EU has become the largest soybean meal importer due to faster-than-production-growth of consumption.

Page 13: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean industry issues

USA

USA

Brazil

Brazil

Argentina

Paraguay CanadaOther

Other

0

5,000

10,000

15,000

20,000

25,000

30,000

CHINA EU

mill

ion

s M

T

Soybean Soybean meal

Soybean oil

Import source by major importing countries (2005)

Source: UN Comtrade

Argentina

Brazil

Argentina

Brazil

UAEUSAOtherOther

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

CHINA INDIA

mill

ion

s M

T

• Major soybean importing countries are mainly supplied by major soybean exporting countries such as U.S., Brazil, and Argentina.

• China, India, and EU are heavily rely on major producers of soybean meal and soy oil in Latin America.

Argentina

Argentina

Brazil

BrazilOther

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

EU THAILAND

mill

ion

s M

T

Page 14: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean import by major importer

Soybean industry issues

EU-25

JapanMexico

China

Taiwan

Other

0

20,000

40,000

60,000

80,000

100,000

2001 2003 2005 2007 2009 2011 2013 2015

1000

MT

Source: USDA

• China is expected to maintain its position as the largest soybean importer on the back of growing meat consumption thanks to country’s healthy economic growth.

projection

Page 15: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

2005/06 2007/08 2009/10 2011/12 2013/14 2015/16

EU Japan SE Asia Latin America

Africa&ME China India Other

mill

ion

MT

Soybean derivative product imports projection

Source: USDA

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean industry issues

• The persistent imbalance between production and consumption growth would create a need for greater EU’s reliance in imported soybean meal.

Page 16: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean industry issues

U.S.

Argentina

Brazil

China

Rest-of-World

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

96/9

798

/99

00/0

102

/03

04/0

506

/07

08/0

910

/11

12/1

314

/15

16/1

7

1,0

00 M

T

• World ending stock for soybean is quite abundant, have increasing trend, and no foreseeable pressure for soy price increase is expected.

World soybeans ending stock

Source: FAPRI

projection

Page 17: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean industry issues

Brazil Factor

Argentina Factor

U.S. Factor

STABLE SOYBEAN

ENDING STOCK

• Harvested area Increased by 86% from 11.8 million ha (1996/7) to 22 million ha (2005/6).

• Yield improvement from 2.43 t/ha in 1998 to 2.67 t/ha in 2006

• Harvested area Increased by 145% from 6.2 million ha (1996/7) to 15.2 million ha (2005/6).

• Yield improvement from 2.45 t/ha in 1998 to 2.78 t/ha in 2006

• Stagnant harvested area• Yield improvement from 2.62 t/ha in

1998 to 2.87 t/ha in 2006

Yield improvement and harvested area expansion in major soybean producing countries are key to stable global soybean ending stock.

Page 18: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

U.S.

Argentina

Brazil

ChinaIndia

Rest-of-World

0

20,000

40,000

60,000

80,000

100,000

120,000

96/9

798

/99

00/0

102

/03

04/0

506

/07

08/0

910

/11

12/1

314

/15

16/1

7

1,00

0 h

ecta

res

Soybean area harvested

Source: FAPRI

projection

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean industry issues

Page 19: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

Yield (ton/ha)

Source: calculated from USDA publication

2.622.45 2.43

1.78

1.42

2.872.78

2.67

1.74

1.48

US Argentina Brazil China Other

19982006

• U.S. yield still a bit above those of Argentina and Brazil, with 2.87 ton of soybean produced per hectare in 2006.

• Argentina’s yield is growing fastest due to its monoculture system that require large area (1,000-2,000 hectares).

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean industry issues

Page 20: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

Feed Use

Food and Other

Ending Stocks

0%

20%

40%

60%

80%

100%

96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 16/17

Crush

Food UseOther Use

Ending Stocks

0%

20%

40%

60%

80%

100%

96/97 98/99 00/01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 16/17

Corn use Soybean use

Source: FAPRI

• Corn use for feed and food are currently in competition with ethanol. This has resulted in tight ending stock.

• The case does not apply for soybean as there are no significant alternative use of soybean (like corn for ethanol) resulting in stable ending stock.

projection projection

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean industry issues

• The expected unchanged use pattern of soybean is also a major factor that stabilize global soybean ending stock

Page 21: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean industry issues

Argentina

Brazil

EU-25

Rest-of-World

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

99/0

001

/02

03/0

405

/06

07/0

809

/10

11/1

213

/14

15/1

6

1,0

00 M

T

Source: FAPRI

Soybean meal ending stock Soybean oil ending stock

U.S.

Argentina

BrazilChina

Rest-of-World

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

96/9

798

/99

00/0

102

/03

04/0

506

/07

08/0

910

/11

12/1

314

/15

16/1

7

1,0

00 M

Tprojection projection

• Both soybean meal and oil projections are showing relatively stable ending stock.

• Major soybean oil and meal producer are expected to maintain their productivity level for the next 10 years.

Page 22: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

Global soybean production

Soybean trade pattern

Impact on soybean price

Soybean industry issues

U.S Crushing Situation• Closures of MNC-owned crushing plants

(±16,000 mt/day) due to low crushing margin.

• Those plants have been gradually relocated to Latin America & China.

• The construction of ±12,000 mt/day of new crushing plant owned by the U.S farmer organizations

Latin America Crushing Situation• Bunge, Cargill, ADM, and Coinbra of Louis

Dreyfus have all significantly expanded their crushing capacities through acquisitions and plant expansions in Brazil, Argentina, and other parts of Latin America

China Crushing Situation• China’s soybean crushing industry has

witnessed the growing large investment in new crushing plants conducted by MNC such as ADM & cargill as well as local Chinese firms.

The stable ending stock of soybean products such as SBM and soy oil can be attributed to the expansion crushing plant in Latin America and China that compensated the decreasing capacity in the U.S

Decreasing

Increasing

Increasing

Page 23: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

Global Soybean Report – April 2007

0

200

400

600

800

1,000

1,200

1970 1980 1990 2000 2002 2003 2004 2005 2010 2015

soybeans

soybean meal

soybean oil

US

$/m

tSource: World Bank (2004)

Soybean, soybean meal, and soybean oil long-term price projection (constant 1990 dollars)

projection

Global soybean production

Soybean trade pattern

Soybean industry issues

Impact on soybean price

• Owing to the relatively unchanged soybean use pattern and abundant ending stock, price pressure for soybean is less likely to materialize in the near future.

• This hypothesis is also supported by World Bank’s projection as can be seen at chart above.

Page 24: World Soybean Situation 2007 >. Global Soybean Report – April 2007 Global soybean production Soybean trade pattern Soybean industry issues Impact on soybean

For queries please contact:

Ibnu Edy Wiyono & M Ryan Sanjaya

Economic & Business Research

Vice Chairman Office – Charoen Pokphand Indonesia

Email : [email protected]; [email protected]

Phone : 62-21-6919999, Ext. 504/576 Fax : 62-21-6922274