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Global Meal Demand Seen Growing Further, USDA Oilseed Expert Says
Buenos Aires, Argentina - On Thursday, the USDA released the second largest amount of soybean sales (2.99 million metric tons) for any week of any crop year ever.
The increased global demand for soybean meal used in the expanding protein diets is getting credit for the increased soybean sales.
Bill George, Oilseeds and Trade analyst at the USDA, was one of the key speakers of the “Opening of the Corn and Soybeans Season” event at the Buenos Aires Cereal Exchange in Argentina Wednesday.
In his address, George provided a positive overview about international demand for soybeans. He projects an annual demand for the oilseed at 15 million metric tons, in the next year, and that prices would be better.
Just as soybean demand is rising, Argentina's farmers face an export tax imposed by their government. For that reason, Argentinian soybean growers will retain grain for more time, waiting for the tax to be faded out throughout 2018.
Separately, George conducted an exclusive interview with Agriculture.com to share his thoughts on the strong U.S. soybean exports.
Agriculture.com: U.S. exports have been strong, what is driving the demand?
Bill George: Supposedly it is China. They usually report sales in the next day. And in the last ten days, there were nine days with reported sales. They have already reached a threshold. This year, they have not bought forward so much because they are waiting to see what goes on with prices. Still, the total sales is behind last year.
Agriculture.com: Can you provide some thoughts on just how strong soybean exports have been?
George: Every year there is higher demand because of China. There is a clear trend of growth.
Agriculture.com: And who is buying other than China? Someone else?
George: Vietnam has seen some growth, but also Iran, Bangladesh, and Pakistan. The case of Iran is interesting because before the sanctions they used to buy from India and this was basically soybean meal. As the sanctions were out, they stopped buying from India and purchase the grain to process there. And Indian consumed more meal. Demand for soybean meal had a slight increase. India was a major soybean meal exporter, but Argentina has gained market share.
Agriculture.com: Is there any country that is more competitive to supply the exact product that the market wants? I mean if the market wants, you can provide grain, soybean meal or soybean oil…
George: I think that generally speaking nobody is more efficient than Argentina in this. The U.S. sells a lot of soybean meal to Mexico. But Argentina has a lot of processing facilities near the farming locations. Every year they export a lot of processed grain.
Agriculture.com: Why is protein demand growing globally? What does this mean for the U.S. soybean supplies?
George: A lot of people [in Asia] are eating more pork, poultry, beef, and doing aquaculture. And you need a lot of soybean meal to feed these animals. This is all pushed by rising incomes and increased urbanization.
Agriculture.com: A speaker from the World Bank today here said in his lecture that the recovery of the Brazilian economy will be very important for commodity prices in general. Do you agree with him?
George: I’d trust him…He is a lot smarter than me… I guess… If Brazil does grow, it would be positive for the prices because they will consume more beans and other things domestically. I don’t think it would have a direct impact on Brazil buying more, but it will impact the supply, they will use more products internally.