IndexBox has just published a new report: ‘World – Soya Beans – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.
The currently increasing demand for soybeans in biofuel production, animal feed and food products outpaced production growth, resulting in a significant hike in soya prices. Together with expectations of further price growth, it contributes to rising costs of many downstream products and accelerates food inflation. In China, rebuilding pig herds after swine fever outbreaks emerges as a new driver for the global market. Those factors highlight soybeans as an attractive commodity to invest in, leading to robust expansion of crop acreage in the U.S. and Brazil.
Key Trends and Insights
Global soybean consumption increased steadily over 2020-2021, while soybean stocks worldwide have seen rapid depletion. The escalating demand in China, which accounts for 60% of the growth in the soybean trade worldwide, is currently the key driving force of the global soybean market. China is significantly rebuilding its livestock population following outbreaks of African swine fever, and the demand for soybean has surged, as soya is a key additive ingredient to livestock feed.
The expected recovery in demand for biofuel as the global economy emerges from the pandemic also shapes further expansion of the raw soybean market. The high soybean prices may yet curb the biofuel market’s growth rate, removing the soybean fuel as a viable competitor in terms of conventional types of fuel.
The fear that the demand for soybeans will soon exceed supply, combined with the rising production costs, contributes to prices increases. The average soybean price (Rotterdam CIF, US origin) in 2020 stood at $380 per tonne; then, in the first half of 2021, prices soared to $544 per tonne. This hike should lead to higher prices for meat, animal feed and biofuel.
The high prices for animal proteins are further enhancing the development of the market for alternative soybean foods. In 2020, global investment into the alternative protein industry saw a twofold increase against the previous year. China is forecast to record the most significant rise in the consumption of soybean meal in animal feed, and soybean-derived protein concentrates for general food products.
The promising outlook for the soybean market is attracting investment in a bid to expand potential crop acreage. In 2021, global soybean production is set to increase by 23М tonnes to reach 386М tonnes due to the increase in the land being harnessed for crop production in the U.S. and South America, particularly Brazil. Market performance is forecast to retain its current trend pattern, expanding with an anticipated CAGR of +3.3% from 2020 to 2030, which is projected to bring the market volume to 489M tonnes by the end of 2030 (IndexBox estimates).
Soybean Consumption by Country
The global soybean market value fell slightly to $150.9B in 2020, stabilizing at the previous year’s level. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price).
China (132M tonnes) constituted the country with the largest volume of soybean consumption, comprising approx. 37% of total volume. Moreover, soybean consumption in China exceeded the figures recorded by the second-largest consumer, Argentina (48M tonnes), threefold. Brazil (46M tonnes) ranked third in terms of total consumption with a 13% share.
In China, soybean consumption expanded at an average annual rate of +5.8% over 2012-2020. The remaining consuming countries recorded the following average annual rates of consumption growth: Argentina (+4.4% per year) and Brazil (+4.0% per year).
In value terms, China ($54B) led the market alone. The second position in the ranking was occupied by Argentina ($19.9B). It was followed by Brazil.
In 2020, the highest levels of soybean per capita consumption were registered in Argentina (1,059 kg per person), followed by Brazil (214 kg per person), the U.S. (105 kg per person) and China (90 kg per person), while the world average per capita consumption was estimated at 45 kg per person.
Soybean Exports by Country
Brazil (75M tonnes) and the U.S. (65M tonnes) prevails in soybean exports, together constituting 85% of the total volume. It was distantly followed by Argentina (7.7M tonnes), making up a 4.7% share of total exports. The following exporters – Paraguay (5M tonnes) and Canada (4.4M tonnes) – each finished a 5.8% share of total exports.
From 2012 to 2020, the most notable growth rate in terms of shipments amongst the key exporting countries was attained by Brazil, while exports for the other global leaders experienced more modest paces of growth.
In value terms, Brazil ($29B), the U.S. ($25.9B) and Argentina ($3.1B) were the countries with the highest levels of exports in 2020, together accounting for 90% of global exports.
The average soybean export price stood at $395 per tonne in 2020, approximately mirroring the previous year. Average prices varied somewhat amongst the major exporting countries. In 2020, major exporting countries recorded the following prices: in Canada ($437 per tonne) and Argentina ($407 per tonne), while Paraguay ($323 per tonne) and Brazil ($387 per tonne) were amongst the lowest.
Source: IndexBox AI Platform