EU soybean meal imports continue to fall amid tight S American supplies: sources

New Delhi — EU soybean meal imports have continued a slump seen since the start of the 2020-21 marketing year (July-June) amid tight supplies from its top two suppliers, Argentina and Brazil, market sources told S&P Global Platts.

The EU's soybean meal imports declined 4.6% year on year to 12.3 million mt during over July 1-March 21, while raw soybean purchases rose 3% to 10.5 million mt, imported primarily from the US, according to a European Commission report on March 22.

Soybean meal crushers in Argentina and Brazil are facing extremely tight supply. While Brazilian soybean farmers have virtually no old crop stock left to sell, their Argentinian counterparts are reluctant to trade their oilseed inventories due to the government's tax and revenue policies, analysts said previously.

In addition, Argentinian crushers are facing a supply crunch due to a delayed Paraguayan soy harvest. Argentinian crushers are heavily dependent on Paraguayan soybean supplies until mid-April.

Both Argentina and Brazil are facing the prospect of a delayed harvest for the 2020-21 crop, which complicates the situation further, analysts said.

Additionally, Brazil has experienced high domestic demand for soybean meal-based animal feed because of growing beef, pork and poultry demand from Asia, a Brazilian agriculture analyst said previously. Demand for soybean oil-based biodiesel is also robust due to the B13 mandate, he said.

Argentina and Brazil -- the world's top two soymeal suppliers -- account for around 85% of EU soybean meal imports.

Since the start of the 2020-21 marketing year, Brazilian soybean meal has accounted for 44% of the EU's imports at 5.4 million mt, while Argentina held a 39% share at 4.85 million mt, the data showed.

Raw soybean imports

Amid the South American supply woes, US soybeans farmers have been rapidly selling their stocks in the EU soybeans market, the world's second-largest oilseed importer after China.

The US' market share of EU imports in the 2020-21 marketing year was 49.5%, or 5.2 million mt, while Brazil's share went down a point week on week to 31.4%, or 3.3 million mt, the data showed.

Other major soybean suppliers to the EU were Canada, Ukraine and Serbia, the EC said.

The Netherlands remained the EU's top buyer of raw beans, followed by Spain and Denmark, the data showed.

In the previous marketing year, the EU's soybean meal imports rose 1% year on year to 18.05 million mt, while raw soybean purchases rose 1% to 15.36 million mt, according to the data.

Strong raw soybean demand from the EU is expected to continue to support US soybean futures prices, as the region -- one of the top meat producers -- is likely to increase its meat exports to Asia, an analyst said previously.