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One of the most important factors influencing the price of soybeans is China, the world's largest consumer. According to TF Agroeconomic Consulting, the Asian giant is expected to import around 101 million tons of the oilseed next season, according to an estimate from the USDA (United States Department of Agriculture).
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This would represent no less than 63% of all world demand, which is 160 MT to be exported in the 2021/22 harvest, of which 93 MT will leave through Brazil. “This demand is responsible for a good portion of international soybean prices. Now, China is experiencing difficult days in its economy, mainly due to the sharp increase in the prices of all the raw materials it imports, from ore to soybeans and meat”, emphasize market analysts.
“Its economy, although robust, is showing signs that it cannot handle such an increase. As if that weren't enough, the country's second largest developer, Evergrande, entered bankruptcy proceedings, with a debt of US$ 185 billion, which the government will have to help manage. All of this is having repercussions not only on the Chinese economy, but, due to its size and influence, also on other world economies, which, to a greater or lesser extent, depend on China”, they argue.
One of the direct signals about the soybean sector was given this week: “Chinese soybean crushing plants in Tianjin and Jiangsu have been closed due to tight coal supplies and the PRC's stricter emissions targets. The Louis Dreyfus plant in Tianjin has a capacity of 25k T/day and will remain offline until October at least”, points out the TF.
“Nothing very big, nothing very decisive, but it is another factor that adds to the reduction in demand in Brazil and the USA for soybean oil for the production of biofuels, which could accentuate the drop in prices in Chicago in the medium and long term. deadlines. It’s good to pay attention”, recommend the Consulting experts.
By: Leonardo Gottems | agrolink
