Brazil's Jan-July soybean exports to China touch record high: Secex

Brazil's soybean exports to China over January-July rose to an all-time high of 50.4 million mt, according to the country's foreign trade ministry, or Secex, report released Aug. 7.

According to Secex data, Brazil exported 72.47 million mt of soybeans between January and July this year, up 19.7% on the year, with China accounting for a lion's share of the shipments at 69.5% in this period, the data showed.

Compared with previous years, volumes of Brazilian oilseed to China rose significantly amid price competitiveness, commodity analysts said. Between March to early July, Brazilian soybeans were sold at a steep discount in the range of $20-$60/mt to soybeans from its top competitor, the US, analysts said.

China-based crushers generally prefer protein-rich Brazilian beans over US-origin oilseed. As a result, the opportunity to buy the Brazilian soybeans in large volumes amid steep discounts was too good to let go for the local crushers and traders, analysts said.

In addition, 2023 so far has been an exceptionally good year for Brazilian soybean farmers. Buoyed by a record harvest of over 156 million mt in the marketing year 2022-23 (January-December 2023), the Brazilian oilseed prices have been very competitive in the international market, leading to robust export numbers.

The South American country is forecast to export a record 96 million mt of soybeans in MY 2022-23, up 25% on the year, Brazil's National Agricultural Supply Company, or Conab, said.

US becoming price competitive

In recent weeks, China has started purchasing more US-origin soybeans, as the prices have become more competitive. According to Platts assessments, the basis prices from both Brazil and the US have started converging in recent days as the harvest season approaches for the US beans in September.

Platts, part of S&P Global Commodity Insights, assessed SOYBEX FOB Santos for September deliveries at $537.68/mt and SOYBEX FOB New Orleans at $537.19/mt Aug. 7.

Typically, the US soybeans sales soar between October and January, while the Brazilian beans are sold at elevated volumes for the rest of the year.