Nov 09, 2020

Brazil Importing U.S. Soybeans

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Brazil is the world's largest producer and exporter of soybeans and yet it was announced last week that Brazil is importing soybeans from the United States to meet domestic demands. A maritime agency announced last week that a vessel was being loaded in Louisiana with 38,000 tons of soybeans destined to arrive at the Port of Paranagua in southern Brazil on November 20th. There are additional reports of more sales of U.S. soybeans to Brazil.

These sales already represent the largest since 1997 when Brazil imported more than 600,000 tons of U.S. soybeans. These imports have occurred after the Brazilian government temporarily suspended the 8% tariff for grain imported from non-Mercosul countries. The suspension will remain in place for soybeans until January 15th and for corn until March 31st.

There were concerns that it would be difficult to import soybeans into Brazil because bulk shipments of soybeans from then U.S. might contain GMO soybean varieties that have not been approved in Brazil. That issue was resolved when the Brazilian Minister of Agriculture issued a decree that Brazil would accept GMO varieties approved in the U.S.

Domestic soybean prices in Brazil are at record high levels due to the very tight domestic supplies. Brazil exported record amounts of soybeans earlier this year due to a 35% devaluation of the Brazilian currency which made Brazilian soybeans very competitive in the world market. Additionally, China focused their attention on Brazilian soybeans in the midst of a trade dispute with the U.S. Of the soybeans imported by China between April and September of this year, 86% was from Brazil.

The start of the 2020/21 soybean planting in Brazil was delayed due to dry weather, so that means the soybean harvest will be delayed as well. As a result, there may be additional imports of U.S. soybeans into Brazil enabling crushers to keep operating until the Brazilian soybean harvest starts next February.