Soy Crisis Chat

Dr.P.E.Vijay AnandTechnical Director- Animal Feed and Aquaculture Programs, India

American Soybean Association-International Marketing

Depending on soy meal

In MY 2011/12 World soybean use (254.9 mmt) is projected to be greater than World production (245.1 mmt), leading to an anticipated tightening of World soybean supply-demand balances.

World Soybean Use

World soybean usage has increased an average of 8.5 mmt (+3.8%) annually since MY 2008/09.  

World soybean production increased over the same time period, but all increase occurred from MY 2008/09 to MY 2009/10 (from 212 up to 261 mmt in one year)

Thereafter production trends were stable/declining over the last three marketing years.

World Soybean Use

It is now official that the Argentine soybean crop in 2012 is about 40 – 41 mmt and the Brazilian crop is around 65 – 66 mmt.  The Paraguayan crop is about 4 mmt.  This is about 22 mmt lower than last year’s crop. 

Production fall in SA dictating

US crop will be about 3.3 billion bushels (89.8 mmt) if the U.S. has normal weather and maybe 3.4 mmt (92.5 mmt) if yields are very good. 

US Soybean Crop

Tight - Argentina and Brazil report that both countries may need to import U.S. soybeans before their next harvest. The last time Brazil imported U.S. soybeans was in the mid-1990s.

Strange trend

Strong trend

China is the strongest buyer (55 mmt) of US and SA soy products. This trend will keep spurring global demand

Over the next few months I suggest you may want to advise soybean and soy meal buyers in your region that they should consider locking in new-crop purchases from the U.S. to make sure they will get the supplies they need as well to avoid the potential of higher prices in the fall and winter.  They do not want to get caught short of their needs or having to pay high prices if the U.S. crop is poor

What does not happen in India

India's oil meal exports in the financial year that ended in March 2012 rose 8.9 percent on year to 5.52 million tones on strong demand from traditional buyers like Japan, Vietnam and South Korea,

India oil meal export

A group of Thai feed millers were in the market seeking some150,000 to 170,000 tons of soy meal through a private tender for shipment between October and December, traders said ( April 4, 2012)

An Indonesian feed miller bought soy meal from India at a record-high price of $505 a ton, including cost and freight, this week as prices climb on tight supplies and delay in shipments from South America, traders said on Wednesday ( April 20th 2012).

All are grabbing Indian meal

Iran became a

new market in

2012 – took

0.5 mmt

Who grabs Indian protein?

80% Vietnam, China, Indonesia, Japan, South KoreaWe forget about PK,BG, CE and NE? = 1 MMT?Are we in a position to spare meal; if we know our industry well -we may not

3.5 MMT

0.300 0.100

0.450

0.100

PK NE

BGIN

CE

About 1 MMTIs used by our neighbors

Silently shipping or Slipping?

Despite Y/Y percentages of oil meals, soy meal

exports have been steady at average 3.5 MMT/Yr

2006 2007 2008 2009 2010 2011

Exports 3.42 3.66 3.90 4.11 2.11 3.80

Of total oil meal, 70-80% export volume is SBM

Are we on the right track?Is somebody smarter than we are? Or we are most generous to support some one else’s growth by making sacrifices

Soy use sector

Soy use 2010

Current soy use (MMT)

by 2015

Broiler 2.29 2.61 3.82

Layer 0.808 0.860 1.50

Aquaculture 0.23 0.350 0.833

Dairy 0.100 0.100 0.150Total 3.43 3.92 6.30

SBM situation/forecast

Parameter Value

Soybean Production 9400

Less seeds 1222

Less human consumption 500

Beans to crush 7678

SBM produced 6295

Exports 2112

Domestic Animal 3430

Domestic Human 753

Domestic SBM Use 4183

2010 - 66%consumed in domesticmarket

Domestic dependence

Year Broiler feed (MMT)

SBM

@25%

SBM

@ 28%

2009 7.00 1.75 1.96

2010 7.08 1.77 1.98

2011 7.93 1.98 2.22

2012 8.88 2.22 2.48

2013 9.94 2.48 2.78

2014 11.13 2.78 3.11

2015 12.76 3.19 3.57

Forecasting SBM use by broiler industry

Click forChart

Current Session

Open High Low Last

May'12 427.5 433.0 424.0 432.1Jul'12 428.5 432.8 424.2 432.6Aug'12 424.0 424.0 422.5 422.5Sep'12 402.0 402.0 401.1 401.1Oct'12 - 385.9 384.6 385.9Dec'12 - 382.8 381.1 382.8Jan'13 - 376.5 373.6 376.5Mar'13 360.7 363.0 360.7 361.2May'13 - 355.0 351.6 355.0

Price - hide and seek?

Rs.22464

Rs.29500

What is the solution? Ask for a quota system

Don’t ask for ban – its sensitive to GOI Ask for slashing import dutyBe proactive – do not react ONLY when prices shoot upKeep projecting what the domestic industry needsLook into international rates/trends frequently

Crush margins between meal/oil/seed Weather during sowingCurrent crop disease/production statusExchange ratesGOI policy for MSP, import duty, export incentivesPrice of meal v/s other protein meals

What influences prices?

Diseases in the animal production sectorDemand of SBM from importing countries Demand in the domestic marketCBOT price movement ( reference) Forecast of soy production by USDAShipping, freight and logistics

What influences prices?

Balance Switched We agree that the animal feed industry is moving ahead rapidly New businesses are rapidly increasingNew systems and new species - increasing Animal performances requiring quality and quantity of feed = more raw material required

Quality of investments

Looking beyond..

Internal feeding requirements for India

Government could come under pressure

Alarm..

Countries depending on India need to be proactive and make alternate arrangements for meal supplies

Bells are ringing in India, we must hear them…..

Industry growth will need protein meal for

domestic use

NMS

Forewarned so be Forearmed