World Oilseeds: U.S. Increasing Foothold on South Asia Soybean Meal Market

With 2015/16 soybean meal production expected to be at the lowest level since 2005, India’s exports of soybean meal have nearly evaporated. Once a major regional supplier, India’s soybean meal exports to adjacent countries in South Asia (Pakistan, Bangladesh, Nepal, and Sri Lanka) have fallen to unprecedented levels, although protein meal consumption in the region continues to expand.

Major soybean exporters, including the United States, have filled the void through increased sales of both soybeans and soybean meal to the region. In the current marketing year, U.S. exports of soybean meal account for a quarter of total imports to South Asia, more than double last year and a four-fold increase compared to two years earlier.

When soybean exports are considered, total U.S. share of trade to the region, measured on a soybean meal basis, is expected to approach 40 percent. Brazil has also seen a growing presence in the South Asia market, garnering a quarter of imports this year.

However, the big winner in the region is Argentina which rapidly expanded its share over the last 4 years and currently accounts for over one third of soybean meal import share, which is down from a near 50% share in 2014/15.

While India soybean meal production and exports are expected to increase with better growing conditions in the coming year, there will not be enough meal available to appreciably gain back lost sales. This bodes well for the United States and other exporters hoping to maintain the strong growth in trade seen over past few years.

Soybean Cargo Rejections Cause Egypt’s Soybean Meal and Vegetable Oil Imports to Surge

Between May 2015 and June 2016, Egypt’s agricultural quarantine authorities rejected 15 vessels of soybeans: 2 from Ukraine, 3 from Brazil, 4 from Argentina, and 6 from the United States.

Cargoes have been rejected, totaling approximately 645,000 tons, due to higher-than-permitted levels of ambrosia and fungus. As a result, Egypt’s total 2015/16 soybean import forecast has been reduced 500,000 tons to only 1.3 million. This is reflected in a lower crush forecast, down 40 percent to 1.2 million tons.

The rejections come at a very inconvenient time as Egypt requires soybeans to satisfy growing domestic protein meal and vegetable oil consumption. Due to inability to crush sufficient quantities of soybeans, Egypt has been forced to increase its soybean meal and vegetable oil imports. Imports of soybean meal between October 2015 and July 2016 reached over 2.0 million tons, with the bulk of shipments arriving from Argentina (1.8 million tons) with less than 200,000 tons shipped from the United States.

At the same time Egypt boosted its soybean and sunflowerseed oil imports by approximately 45 percent each. Imports of soybean oil in 2015/16 are forecast at 700,000 tons and sunflowerseed oil at 400,000 tons.

In 2016/17, soybean import volume is forecast to return to previous levels with the added demand resulting from planned expansions in crush activity. Soybean crush it expected at rise to 2.4 million tons in the coming year. However if Egypt’s agricultural quarantine authorities continue to block soybean shipments, domestic crush will suffer and Egypt will continue to rely more on imported soybean meal and vegetable oils to meet demand.

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