Medium-term projections of the IGC to the soybean market
The International Grains Council (IGC) has published in its recent Dec. 15 issue until 2020/21 on the soy market a back-looking medium-term analysis and then a preliminary estimate of the developments.
In the retrospective analysis of the last 5 years, the IGC has determined an increase in production and consumption of an average 4% . The production is subject to strong uctuations in individual years, while demand was relatively steady. Average closing stock were rebuilt in the past two years. The consequences are significant price declines especially in 2015, while the years have supplied previously attractive prices.
On the production side were in particular the United States, Brazil and Argentina with strong offer increases the leading regions. In addition to steady increases of the hectare, in particular the expansion of the areas was crucial.
On the uses side, the share of the oil to the biodiesel production has grown steadily. The typical diet of a growing Asian population have also contributed to the increase in consumption.
In the soy meal sector, increasing livestock herds have promoted the need for high-quality vegetable protein.
The ever-increasing soybean imports of China's, which take approximately two-thirds of worldwide soy trade to are the major driving force. The EU imports show only small increases.
For the next 5-year period until 2020/21, the IGC estimates the growth rates only half as high . It assumes further by strong demand, so as a result, the current above-average inventories are degraded, but remain still at a satisfactory level.
The production increases reach limits by scarce land availability in the United States and Argentina, while Brazil still potential seems to be possible. The United States will leave its leading role in the soy production in Brazil. To what extent Argentina due to expiring export taxes more expanded the soybean production than previously assumed, was not recognizable taken into account in the forecast.
The IGC is its projections as a possible average development, which may vary in individual years by weather, currency and politically-related features.
