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Oilseeds World Markets and Trade - November 2011

16 November 2011

USDA Foreign Agricultural Service

GLOBAL - High prices and strong demand have stimulated China’s soybean oil production, significantly reducing its reliance on imports.

China’s Rising Soybean Oil Production Reduces Reliance on Imports

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In fact, imports as a percent of consumption dropped from nearly 30 percent to only 10 percent in just 4 years. While imports are still needed to satisfy growing demand, the rise in production reflects changing market dynamics.

Growing market demand for meal and the release of soybeans from reserves at favorable prices have stimulated crush, producing more oil. However, it is unlikely that future needs can entirely be met from crush, unless additional domestic or foreign markets are found to absorb the excess concurrently-produced meal.

A forecast decline in China’s soybean oil imports will have little impact on global markets as key exporting countries (United States, Argentina, and Brazil) are diverting more oil for use in biodiesel production.

OVERVIEW

Global soybean trade is lowered this month due to reduced exports by the United States and Argentina. Global production is up as larger crops in Brazil and Paraguay more than offset reductions in the United States and Argentina. World demand for soybean meal is slightly up, while oil is down. U.S. season average price is lowered, but remains a record.

SOYBEAN PRICES

U.S. export bids, FOB Gulf, in October fell $40 from the previous month, averaging $471 per ton, the lowest since October last year. The sharp decline was largely due to slow export demand from China and fears over the global economy related to the EU debt crisis.

As of the week-ending October 27, U.S. soybean commitments (outstanding sales plus accumulated exports) to China totaled 12.9 million tons, compared to 17.6 million a year ago. Total commitments to the world are 18.5 million tons compared to 28.9 million for the same period last year.

2011/12 TRADE OUTLOOK

  • U.S. soybean exports are cut 1.4 million tons to 36.1 million on slow sales to traditional markets during the peak shipping season.
  • Argentina’s soybean exports are slashed 1.0 million tons to 10.8 million on reduced exportable supplies.
  • Brazil’s soybean exports are raised 1.5 million tons to 38.0 million supported by larger exportable supplies.
  • Japan’s soybean imports are cut 250,000 tons to 3.0 million on expectations of declining demand for crush.
  • China’s palm oil imports are lowered 350,000 tons to 6.3 million as the previous year’s imports were much smaller-than-expected.

Further Reading

- You can view the full report by clicking here.

November 2011

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