Brazilian Soybean Balance in 2023 and Prospects for 2024

The soybean and biodiesel production chain in Brazil saw multiple records set in 2023. The harvest reached an unprecedented 160.3M tonnes, with 54.2M tonnes crushed and 101.9M tonnes exported. To put this in perspective, the crushing volume exceeded the entire 2002 harvest, and exports surpassed those of the 2016 harvest. This performance is indeed remarkable.

The industry benefited from favourable conditions, particularly in soybean meal exports, which totalled 22.5M tonnes. Of this, 10.4M tonnes were exported to the European Union and 10.3M tonnes to Southeast Asian countries. Notably, shipments to the Middle East reached 1.5M tonnes, marking an impressive annual growth of 15%. This segment’s outlook remains optimistic due to the high diversification of consumer countries. Domestic consumption also increased by approximately 1.2M tonnes, reaching 19.9M tonnes, supported by a favourable macroeconomic environment and GDP growth of 2.9%.

Soybean oil presented significant uncertainties in the past year, particularly concerning domestic demand. The year began with a mandatory biodiesel blend of 10%, which was increased to 12% in April 2023 by the National Energy Policy Council. This decision boosted domestic consumption by about 1.8M tonnes, nearly 17% of production. Exports proceeded as expected, totaling 2.3M tonnes, cementing Brazil’s position as a key supplier.

Looking ahead to 2024, initial expectations for the harvest were set at around 165M tonnes due to anticipated area and productivity growth. However, severe droughts in Mato Grosso, Goiás, and Bahia have altered this forecast. Projections now range from 153M to 156M tonnes, with ABIOVE estimating 153.9M tonnes, ensuring ample supply for both domestic and international markets.

Soybean meal exports are expected to decline slightly to 21.6M tonnes in 2024. Early data suggests that Southeast Asia may surpass Europe as the primary destination for Brazilian soybean products. The domestic market remains a focal point, with apparent consumption still nearly 8% lower than in the first quarter of the previous year, resulting in a record final stock of close to 3M tonnes.
Conversely, soybean oil is projected to deliver positive outcomes. With the biodiesel blend raised to 14% since March, total biofuel consumption is expected to reach 9.1M cubic metres, increasing demand for soybean oil to 5.9M tonnes. However, exports are anticipated to drop to 1.1M tonnes due to a shift in focus to the domestic market.

The recent severe floods in Rio Grande do Sul have added uncertainty to the scenario. The state, which had an estimated crop of 21.4M tonnes by CONAB, suffered significant losses due to these floods. This event poses substantial challenges, as part of the crop remains unharvested and several silos have been destroyed. The full impact on Brazil’s soybean balance, in terms of both crushed and exported volumes, remains to be seen.

The overall picture for Rio Grande do Sul and Brazil’s soybean supply and demand will become clearer over time. Currently, it is crucial to implement actions to assess damages, mitigate impacts and develop robust policies for the future. May this year be marked by resilience and successful overcoming of adversities.