realize that imports are the future in any case, or as Brazilian market expert Dr Osler Desouzart states regularly: “Animal proteins should be produced where the water, land and feed resources are and then be exported. That is far more efficient than importing the raw materials and produce livestock your- self.” More importantly, the first signs of poultry meat moving in to China are already there and come from the Chinese min- istry of agriculture. It reports a 9% increase in poultry con- sumption in 2019, coupled with a 32% rise in imports, mainly from Brazil.
Cheaper soy for everyone As a consequence of the diminished pig herd size of the world, the demand for soybeans is dropping too. This change in de- mand is putting the China-US trade tension around soy tariffs on the backburner. Since 2018 this trade tension was top of mind, with China avoiding US tariffs by sourcing their soy from Brazil and European traders moving out of Brazil and buying in
the US. Price consequences of this merry-go-round were limit- ed, but that was just lucky that Brazil’s exportable supplies were much more plentiful than anyone had expected. Today, just as the USDA reports the largest soy stock in the world ever, over 100 million tons and with superb production forecasts in the pipeline, soy is expected to stay cheap. The US Department of Agriculture is forecasting a decline or slower growth in Chinese soy imports for the next couple of years. Chinese soy imports dropped 14% in the first quarter, partly because the trade tension made feed companies switch to alternative proteins. The forecast for the whole of 2018-19 season encompasses a decline, for the first time in 15 years, to 88 million tons, which is expected to drop further 71 million tons in 2019-20 due to the impact of African swine fever. Mid-April the International Grains Council notes that the soybean price is 21% down from one year ago, creating favourable conditions for all disease free animal protein producers around the world.
▶ POULTRY WORLD | No. 4, 2019
A record stock, good produc- tion forecasts and diminishing demand due to swine fever makes soy prices go down.
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