September 26, 2013
US soy exports rise over time
US soy exports have generally trended upward over time in contrast to corn where US exports have generally been flat since hitting a peak between 1979 and 1981.
The US soy export increased over time since 1964 until it reached the 40 million tonnes level in 2009 but with a drought reduced crop, US soy exports in 2012 were only 35.8 million tonnes.
The soy, soymeal and soyoil make up the soy complex. In 2012 soymeal and soyoil exports added 10.9 million tonnes to US soy exports for a total soy complex export level of 46.7 million tonnes. In 1964, soymeal and soyoil comprised 29.8% of US soy complex exports while in 2012 these further processed products made up 23.3%.
In 1964, US soy complex exports accounted for 81.1% of world soy complex exports. By 2012, the US share of world soy complex exports had fallen to 27.5%. That difference has been largely taken up by Argentina and Brazil.
Brazil exported 1.8% of world soy complex exports in 1964, growing to 32.2% in 2012 (54.9 million tonnes). Of the 2012 soy complex exported by Brazil, soymeal accounted for 23.7%. Before 1995 when China began its rapid increase in soy imports, that percentage was 68.7% as Brazil began competing with the US to capture a portion of the Chinese unprocessed soy market.
Currently soyoil accounts for 2.5% of Brazil''s soy complex exports. In 2012, 73.8% of Brazil''s soy complex exports were unprocessed soy. Argentina did not begin to export any of the products in soy complex until 1972 when it began to export soymeal and soyoil. From a miniscule 0.2% in 1972 world soy complex exports, Argentina''s share has grown to 24.1% in 2012 (40.9 million tonnes).
Over the whole period, Argentina has concentrated on exporting the crush products of soymeal (67.4% of its soy complex exports in 2012) and soyoil (11.0%), capturing the added value of the crush. In 2012, Argentina accounted for 45.5% of world soymeal exports, with Brazil coming in at 21.5% and the US in third position at 16.3%. All other exporters divvied up the remaining 17.0%,
World exports of soy complex in 1964 accounted for 34.7% of world soy production while in 2012 that percentage had nearly doubled to 63.4% (169.7 million tonnes). Exports are far more important to soy producers than they are to corn farmers, with corn exports accounting for 10.7% or world corn production in 2012.
Much of the recent soy export boom has been driven by China which, as we noted earlier, ramped up its unprocessed soy imports in 1995. In the 1998-2001 period, it was China''s imports of soy that provided a bright spot on an otherwise dismal agricultural commodity price picture. And, as corn ethanol production roared to the fore in recent years, the competition between corn and soy for planted acres has lifted the price of all storable agricultural commodities.
China moved into the soy complex import market in 1994 when it increased its imports of soyoil by 1.1 million tonnes to 1.7 million tonnes. The following year China not only began to increase its soy imports (0.8 million tonnes), it also boosted its soymeal imports to 1.2 million tonnes, up from 50,000 tonnes a year earlier. In 2012, China''s imports of soymeal fell to 20,000 tonnes while soyoil imports were 1.6 million tonnes.
China''s imports of the soy complex accounted for 5.3% (3.5million tonnes) of world soy complex exports in 1996. By 2012, China''s share of world soy complex trade had increased to 35.7% (60.6 million tonnes). In absolute terms China''s soy complex imports increased by 57.1 million tonnes (54.6% of world soy complex trade).
Without China''s 57.1 million tonnes increase in soy complex imports over the 1995-2012 period, the pressure on suppliers like Argentina, Brazil and the US would have been much lower, as the result of diminished competition for acres between corn and soy over that period. As a result farmers would have seen lower prices for their soy and corn. China''s soy complex imports were clearly responsible for the prosperity soy farmers have enjoyed over the last two decades.
The USDA estimates that in 2011 China held 15.9 million tonnes of unprocessed soy as ending stocks, 114.2% of its domestic consumption. With tight world soy supplies and reduced production in 2012, China used 4.3 million tonnes of its stocks to meet increased domestic consumption, reducing the ending stock percentage to 98.7%.
In less than two decades, China has gone from meeting virtually all of its domestic soy complex needs with domestic production to the point where domestic production equals just 16.9% of domestic consumption. While China seeks to maintain self-sufficiency in grains, it clearly has made an exception to its self-sufficiency policy for soy.