Wandile Sihlobo, Agbiz

One of the key drivers of global soya bean production is the growing demand for soya bean meal for the animal feed industry. The United States Department of Agriculture (USDA) estimates that the 2018/2019 global soya bean meal production could reach 247 million tons, up by 36% from the previous season. China, the United States (US), Argentina, Brazil, European Union (EU), India and Russia are the key drivers of this uptick in meal production.

There are a couple of interesting things about China’s lead in soya bean meal production. Firstly, China produces roughly a third of the global soya bean meal and almost all of it is utilised within the domestic animal feed industry. Secondly, China is a small producer of soya bean, with the 2018/2019 production estimated at 15 million tons. Therefore, meal production is largely boosted by imports. Lastly, China is likely to remain a key producer of the meal, hence soya bean imports are set to increase in the near future. The USDA forecasts the country’s 2018/2019 soya bean imports at 103 million tons, up by 6% from the previous season.

Argentina, which is the third leading producer of soya bean meal, is an important player in the South African animal feed industry. While South Africa’s soya bean meal imports have been on a declining trend since 2010, Argentina remains the key supplier, accounting for 99% of the imports into South Africa.

Last year (2017), South Africa imported 553 003 tons of soya bean meal. We estimate that this year imports could decline by 17% to 458 992 tons. This is largely on the back of expected large domestic soya bean supplies. As set out in yesterday’s (18 June 2018) note, South Africa’s soya bean supplies are in better shape in the 2018/2019 marketing year, estimated at 1.75 million tons, up by 24% from the previous year. The supply figure includes production, opening stock and a small volume of imports. – Wandile Sihlobo, Agbiz

Wandile Sihlobo, head of economic and agribusiness intelligence at Agbiz, shares highlights in his update on agricultural commodity markets. Click here for the full report on agri markets for the major commodities.

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