September 18, 2013
Brazil may surpass US soy production
Brazil is jostling for first place as a soy producer with the US, with more than 82 million tonnes harvested this year, boosted by a jump in demand from China and Europe.
"Up until now, the supply has increased sharply. But the demand has grown even more, which explains why the price for a tonne of soy exceeded US$100 in the early 2000s and is now above US$500," said Argentine economist Luciano Cohan.
China imports soy at the rate of 60 million tonnes for 2012-13 and an expected 70 million for 2013-14. It then transforms the soy into oil or flour, while European countries tend to purchase soymeal to feed industrially-raised chickens, pigs and cattle.
South American soy is mostly genetically modified but Cohan insisted that was not cause for controversy.
The soy boom owes much to US seed giant Monsanto, which marketed in 1996 a GMO soy variety resistant to glyphosate, a powerful, broad-spectrum herbicide.
Environmental groups condemn the focus on the crop at the expense of livestock farming and wheat, deforestation, the aerial spraying of pesticides and water pollution.
Brazil has matched US production because new lands have been cultivated for soycrops, sometimes encroaching on forests, namely in the cerrado plateau region home to the country''s soy powerhouse Mato Grosso state.
But converting to all-soy crops, which require little manual labour, also bears an important social cost. Small farmers have fled the fields for the already overpopulated big city favelas.
In Brazil, soy is the third biggest export product (11%), behind minerals and oil. Thanks to a push from "Brasiguayos" Brazilian farmers in Paraguay, soy meal and oil production there has quadrupled in a single year. This tiny country of just seven million people, niched between Brazil and Argentina, is now the world''s sixth largest producer and fourth biggest exporter after Brazil, the US and Argentina.
In Argentina, this year''s harvest was not a record but soy already accounts for a quarter of exports and is a major driver of the economy. Next year''s harvest is set to be the greatest ever, with a projected 53.5 million tonnes.
Argentina''s farmers protest the government''s big tax burden -- 35% on soy exports -- and as a result did not plant as much as they could. They retort that Argentina emerged out of its economic crisis in 2001 thanks in large part to soy''s jump in the markets.
South America is seeing record harvests and 2013-14 forecasts say the region''s production will increase even further, according to UN Food and Agriculture Organisation soy expert Peter Thoeness.
Argentina''s "soy king" Gustavo Grobocopatel expects soy to continue its growth over the next 10 to 15 years before levelling off.
Soy production is expected to double over the next half-century. Demand for meat will increase while soy production must increase even faster than the population in order to meet this demand for meat. The more people eat meat, the more we need corn and soy to feed the animals."