1. World Soybean Situation 2007
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2. Global soybean production
What countries are the global leading soybean producers (including soybean meal and soybean oil) and how they use their production
Global soybean production
What countries are the world major soybean exporters and to where they export most
What countries are the world major soybean importers and from where they import most
Soybean trade pattern
Brief review on global production drivers of soybean and its derivative products such as harvested area and crushing capacity expansion as well as yield improvement,
Soybean industry issues
Impact on soybean price
What would be the possible impact of global soybean industrial issues on soybean prices

3. Global soybean production
The world was producing more than 228 billion metric tons of soybean last 2006.
The global production is expected to reach 280 billion metric tons by the next 10 years thanks to persistent production increase in U.S., Brazil, and Argentina that make up 82% of global production.
Global soybean production
Soybean trade pattern
Soybean production
Soybean industry issues
projection
Impact on soybean price
Source: FAPRI

4. Global soybean production Soybean meal production
Soybean oil production
projection
projection
Soybean trade pattern
Soybean industry issues
Impact on soybean price
Source: FAPRI
China, Brazil, and Argentina would play a pivotal role in the expansion of global soybean meal and soy oil production thanks to countries’ soybean crushing capacity expansion initiated by global companies such as ADM & Cargill.

5. Global soybean production U.S. soybean use 2006
Not crushed
Soybean trade pattern
Domestic
Consumption
(53 billion MT)
Domestic
consumption
Soybean
meal
Soybean industry issues
Crushed
Exports
Domestic
consumption
Oil
Impact on soybean price
Waste
Exports
Exports
(30 billion MT)
U.S. exported more raw soybean than that of soybean products such as soybean meal and soy oil.

6. Global soybean production Argentina soybean use 2006
Not crushed
Domestic
consumption
Soybean trade pattern
Domestic
Consumption
(36 billion MT)
Soybean
meal
Soybean industry issues
Exports
Crushed
Domestic
consumption
Impact on soybean price
Oil
Exports
Waste
Exports
(7 billion MT)
By contrast, the most part of Argentine’s export is in the form of soybean meal and soy oil.

7. Global soybean production Brazil soybean use
Not crushed
Soybean trade pattern
Domestic
consumption
Domestic
Consumption
(30 billion MT)
Soybean
meal
Crushed
Exports
Soybean industry issues
Oil
Domestic
consumption
Waste
Exports
Impact on soybean price
Exports
(26 billion MT)
Similar to the U.S., nearly half of raw soybean in Brazil were exported without processing.

8. Export volume of soybean and its derivatives (1000 MT)
Soybean meal
Global soybean production
Soybean trade pattern
Soybean industry issues
Impact on soybean price
Soybean oil
U.S. is currently the largest global supplier of raw soybean.
Argentina’s soybean meal and soy oil export are dominant in global market.
Brazil is the second largest supplier of raw soybean and soybean products.
Source: USDA

9. Export destination by major exporting countries (2005)
Soybean
Soybean meal
Global soybean production
Soybean trade pattern
Soybean industry issues
Impact on soybean price
Soybean oil
China has become the ultimate raw soybean buyer of U.S, Brazil, and Argentina.
A large part of soybean meal produced by Brazil & Argentina are exported to Europe.
China & India are the major soybean oil foreign market for Brazil & Argentina.
Source: UN Comtrade

10. Global soybean production Soybean export by major exporter
projection
Soybean trade pattern
Soybean industry issues
Impact on soybean price
Source: USDA
Brazil is expected to be the largest soybean exporter in the next decade with amount of 62 million MT next 2016/17 and export to grow at 8.5%/year on average.

11. Soybean derivative product export projection Global soybean production
Soybean trade pattern
Soybean industry issues
Impact on soybean price
Source: USDA
Brazil, in combine with Argentina, is also expected to be the leading global supplier of soybean products i.e. soybean meal and soybean oil.

12. Import volume of soybean and its derivatives (1000 MT)
Soybean meal
Global soybean production
Soybean trade pattern
Soybean industry issues
Impact on soybean price
Soybean oil
The increasing soybean crushing capacity has changed China’s import pattern from importing more soybean meal to importing a large amount of raw soybean.
EU has become the largest soybean meal importer due to faster-than-production-growth of consumption.
Source: USDA

13. Import source by major importing countries (2005)
Soybean
Soybean meal
Global soybean production
Soybean trade pattern
Soybean industry issues
Impact on soybean price
Soybean oil
Major soybean importing countries are mainly supplied by major soybean exporting countries such as U.S., Brazil, and Argentina.
China, India, and EU are heavily rely on major producers of soybean meal and soy oil in Latin America.
Source: UN Comtrade

14. Global soybean production Soybean import by major importer
projection
Soybean trade pattern
Soybean industry issues
Impact on soybean price
Source: USDA
China is expected to maintain its position as the largest soybean importer on the back of growing meat consumption thanks to country’s healthy economic growth.

15. Global soybean production
Soybean derivative product imports projection
Soybean trade pattern
Soybean industry issues
Impact on soybean price
Source: USDA
The persistent imbalance between production and consumption growth would create a need for greater EU’s reliance in imported soybean meal.

16. Global soybean production
World ending stock for soybean is quite abundant, have increasing trend, and no foreseeable pressure for soy price increase is expected.
Global soybean production
Soybean trade pattern
World soybeans ending stock
projection
Soybean industry issues
Impact on soybean price
Source: FAPRI

17. Global soybean production
Yield improvement and harvested area expansion in major soybean producing countries are key to stable global soybean ending stock.
Soybean trade pattern
Brazil Factor
Harvested area Increased by 86% from 11.8 million ha (1996/7) to 22 million ha (2005/6).
Yield improvement from 2.43 t/ha in 1998 to 2.67 t/ha in 2006
Soybean industry issues
STABLE SOYBEAN ENDING STOCK
Argentina Factor
Impact on soybean price
Harvested area Increased by 145% from 6.2 million ha (1996/7) to 15.2 million ha (2005/6).
Yield improvement from 2.45 t/ha in 1998 to 2.78 t/ha in 2006
U.S. Factor
Stagnant harvested area
Yield improvement from 2.62 t/ha in 1998 to 2.87 t/ha in 2006

18. Global soybean production Soybean area harvested
projection
Soybean trade pattern
Soybean industry issues
Impact on soybean price
Source: FAPRI

19. Global soybean production
U.S. yield still a bit above those of Argentina and Brazil, with 2.87 ton of soybean produced per hectare in 2006.
Argentina’s yield is growing fastest due to its monoculture system that require large area (1,000-2,000 hectares).
Global soybean production
Soybean trade pattern
Yield (ton/ha)
Soybean industry issues
Impact on soybean price
Source: calculated from USDA publication

20. Global soybean production
The expected unchanged use pattern of soybean is also a major factor that stabilize global soybean ending stock
Corn use
Soybean use
Soybean trade pattern
projection
projection
Soybean industry issues
Impact on soybean price
Source: FAPRI
Corn use for feed and food are currently in competition with ethanol. This has resulted in tight ending stock.
The case does not apply for soybean as there are no significant alternative use of soybean (like corn for ethanol) resulting in stable ending stock.

21. Global soybean production
Soybean meal ending stock
Soybean oil ending stock
Soybean trade pattern
projection
projection
Soybean industry issues
Impact on soybean price
Source: FAPRI
Both soybean meal and oil projections are showing relatively stable ending stock.
Major soybean oil and meal producer are expected to maintain their productivity level for the next 10 years.

22. Global soybean production
The stable ending stock of soybean products such as SBM and soy oil can be attributed to the expansion crushing plant in Latin America and China that compensated the decreasing capacity in the U.S
Global soybean production
Soybean trade pattern
U.S Crushing Situation
Closures of MNC-owned crushing plants (±16,000 mt/day) due to low crushing margin.
Those plants have been gradually relocated to Latin America & China.
The construction of ±12,000 mt/day of new crushing plant owned by the U.S farmer organizations
Soybean industry issues
Decreasing
Impact on soybean price
Latin America Crushing Situation
Bunge, Cargill, ADM, and Coinbra of Louis Dreyfus have all significantly expanded their crushing capacities through acquisitions and plant expansions in Brazil, Argentina, and other parts of Latin America
Increasing
China Crushing Situation
China’s soybean crushing industry has witnessed the growing large investment in new crushing plants conducted by MNC such as ADM & cargill as well as local Chinese firms.
Increasing

23. Global soybean production
Soybean, soybean meal, and soybean oil long-term price projection (constant 1990 dollars)
projection
Soybean trade pattern
Soybean industry issues
Impact on soybean price
Source: World Bank (2004)
Owing to the relatively unchanged soybean use pattern and abundant ending stock, price pressure for soybean is less likely to materialize in the near future.
This hypothesis is also supported by World Bank’s projection as can be seen at chart above.

24. For queries please contact:
Ibnu Edy Wiyono & M Ryan Sanjaya
Economic & Business Research
Vice Chairman Office – Charoen Pokphand Indonesia
Phone : , Ext. 504/576 Fax :