Grain and soya exports from South America are set to surge upwards this year, after a setback over the previous twelve months. The 2017 total could be about one quarter higher, approaching 190mt (million tonnes), based on recent forecasts. If that volume is achieved, it will comprise about a third of world trade in these cargoes.
Soyabeans and meal exports from Brazil and Argentina are the largest part, possibly totalling about 120mt. The balance is mostly corn, plus some wheat and other grain types. During the past decade, growth in South America’s exports has been remarkably strong, although annual changes have varied greatly.
A guide to changes unfolding is shown in the table below, summarizing forecasts prepared recently. As demonstrated dramatically last year, however, expectations sometimes change as the season progresses. Estimates for harvests now under way in South America, and calculations for export sales may be revised. Moreover global import demand, and amounts supplied by competitors in other countries, is subject to constant review.
This year’s total grain and soya exports volume from Brazil and Argentina may be much higher, by an estimated 24%. Figures derived from US Dept of Agriculture data suggest that an overall 36mt increase could be seen, representing a recovery after a 21mt or 12% reduction last year to 154mt.
Several separate USDA forecasts published in the middle of last month have been used for these calculations. Marketing year periods for cereals and oilseeds exports differ, and so the calculated total is not as precise as it appears. The marketing periods differ mainly because harvest timing varies.
The result is a broad indicator of what can be foreseen, based on current information. Illustrating how circumstances can change, twelve months ago a marginal 1% decrease was expected in 2016, but the downturn proved far larger.
JUMPING GRAIN EXPORTS
Exports of wheat plus corn and other coarse grains from South America appear set to resume an upwards trend this year. Following last year’s large reduction, a 23mt or 50% rise to just over 70mt is predicted, benefiting in particular from the impact of abundant rainfall on Brazil’s corn crops.
Argentina’s wheat harvest starts the annual crop production cycle in South America. In the latest harvest completed several months ago output was higher then seen twelve months earlier, at 16mt, reflecting a bigger crop area and good yield. As a result, exports in the marketing year ending November 2017 are expected to increase by 5% to 10.1mt.
Production of corn and sorghum in Argentina this year is now approaching completion and is estimated to total 42mt, about
30% above the previous harvest. The corn crop area has expanded. Exports in the marketing year ending February 2018 could rise by 21% to 27mt.
Corn exports from Brazil have become a prominent feature of world grain trade in recent years but in 2016 there was a severe downturn. Production fell because of adverse effects from dry weather. This year corn production from two separate crops is expected to recover strongly, boosted by good weather, rising by 40% to 94mt. Exports in the year ending March 2018 could reach 32mt, based on USDA estimates, more than double those of the preceding twelve months.
BUOYANT SOYABEANS AND MEAL EXPORTS
Soyabeans and meal sales from South America to a wide range of foreign buyers could strengthen this year, after declining in the preceding period. Exports during 2017 are estimated at almost 120mt, a 13mt (12%) increase. Global import demand continues to expand solidly, although Brazil and Argentina face competition from other suppliers, principally the USA, in many markets.
Brazil’s soyabeans output in the current harvest looks set to increase by 15% from last year, exceeding the symbolic one hundred million level, to reach 111mt. Further growth in the area under cultivation and good yields have assisted. Beans and meal exports in marketing year 2017/18 ending January could rise by 18% to 79mt, based on USDA’s estimates.
In Argentina, soyabeans production in the current harvest seems likely to remain almost flat at 56mt amid a slightly lower crop area. Beans and meal exports during the marketing year ending March 2018 could be about 2% higher at 41mt.
IMPORT DEMAND LOOKS STURDY
South America’s export sales reflect several influences. Grain and soyabeans output in the latest harvests is crucial, while stock levels also have an impact. Competition from other suppliers is relevant. Ultimately, consumption trends and the extent of reliance on foreign supplies in importing countries determines the outcome.
Among importers, changes are visible. There are signs of reduced import demand, in the wheat and coarse grains sector, in China and the European Union. Excessive corn stocks are holding back imports in China, as the government seeks to reduce inventories. Forthcoming domestic harvests in importing countries in mid-2017, if these rise or fall substantially, may alter the outlook.
Within the soyabeans and meal sector import changes are mainly positive. In the dominant importing country, China, which relies on imports for most of its supplies, a rising trend is still evident, reflecting strengthening soyameal and oil usage. In other countries import trends mostly seem positive.