Soybean export: understand how it works and scenario

Check out any journalistic outlet of the last decades and look for news related to the sales of Brazilian products: you will probably find the export of soybeans as one of the most relevant products for Brazil’s trade balance.

With so many sales, the question arises: how is this transport carried out? What are the volumes handled and produced by Brazilian producers? Is there an internal demand, or does the entire amount go outside Brazil?

Continue reading, because today we will show an overview of the Brazilian soybean market, one of the most powerful in the world. Surprised yourself. 

How does the soybean export process work?

Before talking about the transport process itself, it is important to provide a context regarding the production of this oilseed in the country. This is important to understand the requirements related to logistics.

Soybean is one of the country’s main commodities, it has intense production in the Brazilian Midwest, but there are crops with this culture throughout Brazil. Currently, we are the largest producers and exporters of this product in the world: according to Embrapa, we occupy 50% of world trade.

The product is the raw material for the production of various foods, in addition to being used in the development of biodiesel. The bran is used to feed animals around the world.

As for transportation, soybeans are moved via trucks and trains directly to Brazilian ports. This is because maritime transport is the best alternative, both in terms of cost and port logistics to serve the various buyers.

When it comes from Brazil, most of the soybeans are moved along the coast of the Gulf of Mississippi, a route that facilitates delivery to different buyers of the Brazilian product. This also applies to another grain widely marketed here, corn. Ports such as Santarém, in Pará, stand out in this type of transport.

In relation to buyers, the main destination for Brazilian soybeans is China. However, other countries that stand out are the Netherlands, Spain and Thailand, for example. Even the United States, which competes with Brazil in production, also buys the product manufactured here.

In fact, the product arrives in the US via ship, which highlights the importance of ports for this trade, which generates many revenues for the Brazilian trade balance.

How was the scenario of soybean exports in Brazil in 2023?

Although the pace of commercialization of the soybean crop has suffered a slight drop in the last 5 years, below the historical average, Brazil has set new export records. There were about 72.46 million tons shipped, mainly to our main buyer, China.

According to the study by the Supply Company (Conab), 154 million tons were harvested in the 2022/23 harvest. It is worth remembering that the Brazilian domestic market itself also buys a lot of soybeans, so the high production is being well drained.

Also according to Conab data, in July 2023 alone, soybean exports were 9.7 million tons. Another detail is that the port premiums were positive in July, which was decisive for the grain flow.

Port Awards

The premium is an essential indicator to determine the value of a product destined for export. Also known as Basis, it is defined by buyers’ “appetite” for the level of heating demand. In this specific period, the premium was positive, which generates greater income for those who sell.

As if that were not enough, the international prices of this oilseed increased with the increase in prices practiced in the domestic market. In July 2023, prices are cheaper for Brazilian producers, which stimulates consumption.

What is the forecast for soybean exports in 2024?

According to an article in Exame magazine, the global harvest should be 400 million tons of grain in 2024, and Brazil should export approximately 100 million of this amount.

As in the 2022/23 harvest, Brazil will probably maintain the productivity record for the new period. Other global factors that will influence our sales are the recovery of the Argentine crop, the drop in the productivity of US producers and a slight drop in Chinese demand.

Still, according to information from the experts mentioned in the matter, our trade with the Chinese should not drop. In terms of grain production, Conab estimates an amount of approximately 160 million tons.

An interesting detail is that the current moment serves to replenish local soybean stocks. Brazil is expected to end 2023 with a stock of 3 million tons — and, for next year, this amount is projected to reach 8 million.

Everything depends on the climate, especially with the changes brought about by the El Niño phenomenon, which caused record heat in Brazil. Very high temperatures, constantly above 30 degrees, are not the best for growing the grain.

However, the time when soybeans need water most is during the grain filling period, between December and February. The rains are crucial — which is why the southern region of the country, which has not suffered so much from the drought, tends to resume its good production.

For now, according to the experts in the Exame report, the estimate is another harvest record. As we have seen in this article, the export of Brazilian soybeans remains one of the most profitable activities in the country. In addition, it involves an entire chain, from producers to buyers — with indispensable work being carried out by port professionals.

To learn even more about the sale of Brazilian products abroad, be sure to check out our post on how maritime export works.