W4 Soybean Update: China's Soybean Imports Surged 29% YoY in 2023, While Argentina's Processing Dipped by 30%

Brazil's 2023/24 Soybean Crop Achieved Notable Harvest Rate Growth

As of late W4, the 2023/24 Brazilian soybean crop has reached a harvest rate of 2.3%, significantly surpassing the 0.8% recorded in the previous year and exceeding the 1.1% average. This marks the fastest pace since 2017, with Mato Grosso leading at 6.4% of soybeans already harvested. However, hot and dry weather in central Brazil shortened the soybean growth cycle and reduced yields. Conab revised its 2023/24 Brazil soybean crop estimate, lowering it by 4.91 million metric tons (mmt) to 155.26 mmt in W3, while the United States Department of Agriculture (USDA) reduced its estimate by 4 mmt to 157 mmt. Despite these adjustments, both estimates remain higher than most private forecasts. Additionally, dry conditions in the south-central states of Parana, São Paulo, and southern Mato Grosso do Sul since mid-Dec-23 have negatively impacted what was expected to be some of the best soybeans in Brazil, leading to a further reduction of 2 mmt in the W4 estimate to 149 mmt.

Brazil’s Record Growth Surpasses US in China’s Market in 2023

In 2023, China saw a 29% year-on-year (YoY) increase in soybean imports from Brazil, reaching 69.95 mmt, as per customs data. This strengthened Brazil's dominance in the world's largest soybean market, while the United States (US) faced a 13% YoY decline in soybean exports to China, totaling 24.17 mmt. The total soybean imports by China for 2023 amounted to 99.41 mmt, with Brazilian supplies preferred for their cost-effectiveness resulting from a bumper crop. Moreover, Brazil's market share in China grew to 70%, while the US declined to 24% YoY. Notably, in Dec-23, soybean arrivals from Brazil were 94% higher YoY, while arrivals from the US dropped by 31 YoY.

China’s Remarkable Soybean Harvest and Agricultural Commitments in 2023

China attained a record-breaking soybean production of 20.84 mmt in 2023, surpassing previous records. The soybean cultivation area in the country extended to approximately 10.47 million hectares (ha). Moreover, the area dedicated to planting oilseed crops exceeded 200 million mu. The initial successes in revitalizing the seed industry were emphasized, with the collection of over 530 thousand new genetic resources. China has expressed its commitment to maintaining steady progress in agricultural and rural development throughout 2023, aiming to provide robust support for economic recovery and high-quality development.

Argentina’s 2023 Soybean Processing Declined 30% YoY

The Argentine soybean industry processed 27 mmt of soybeans in 2023, significantly declining 30% YoY when 38 mmt were processed. This decrease was due to weak soybean production in Argentina during the 2022/23 harvest, which witnessed a decline of over 56% YoY compared to the previous cycle. In response to the diminished domestic soybean production, Argentina's 2023 soybean imports more than tripled compared to the prior year, totaling 10.4 mmt. Of this amount, 39%, equivalent to 4.1 mmt, originated from Brazil. This marked a substantial increase compared to 2022 when Brazilian imports constituted only 9% of Argentine imports. Imported soybeans constituted a record 36% of the total crushed in Argentina in 2023, a stark contrast to the 8% share in the previous year. This shift reflects the increased reliance on imports to meet domestic demand due to the reduced domestic soybean production.