September 19, 2013
Brazil soy crushers and exporters struggle despite record crop
Despite a record soy harvest of 81.6 million tonnes as of May, Brazil''s soybean crushing to produce meal and oil is at its lowest level since 2009, industry specialists said on Tuesday.
About 19.3 million tonnes of soybeans were crushed from the start of the industrial year in February through the end of July, down 7% on-year from 20.8 million tonnes last year, according to the latest data from Brazil''s vegetable oils industry association, Abiove.
Abiove General Secretary Fabio Trigueirinho said this year''s tally through July included data from all the operating crushers in Brazil, the world''s second biggest soybean producer after the United States.
Droughts in 2012 that destroyed several millions of tonnes of soybean crops in South America and the United States resulted in the drop in activity. The droughts pushed stocks to record lows and led to persistently high prices for beans, said Lucilio Rogerio Alves, research professor at the agricultural economics think tank Esalq/USP.
Crushers have struggled passing on the high prices for soybeans to customers in the domestic feeds and cooking oils markets, which has made exporting more attractive. Brazil is expected to export more soybeans than it crushes domestically this year and is expected to consolidate its role as the world''s largest soybean exporter in 2013.
However, Brazil soy exports are hampered by congested ports. Brazil was rated the top soybean exporter before the port crisis began to affect grain exports. US Department of Agriculture estimates upgraded the Brazilian crop, which will be harvested early in 2014, to 88 million tonnes, about 3 million tonnes ahead of forecast US output.
Earlier this year Brazilian President Dilma Rousseff overturned ruling Workers Party''s socialist ideals and invited private firms to run the country''s congested ports and airports. But the logistics problem has been compounded by huge imports in preparation for next year''s FIFA World Cup and the Olympics in 2016.