The United States is the world’s largest soybean producer and Brazil is the largest exporter, a long-term trend that is putting U.S. farmers at a disadvantage in sales to China, which buys 60 percent of the soybeans on the world market. Chinese customs data says that Brazil’s share of the Chinese market topped 53 percent in 2017, its highest share ever, says Reuters.
At the same time, the U.S. share shrank to 34 percent, the lowest since at least 2006. Brazil gained ground because of competitive prices and higher protein content in its soybeans. “Chinese buyers mainly use soy to churn out cooking oil and ingredients for animal feed,” said Reuters.
Brazil has been the No. 1 supplier to China since 2012. It has a smaller domestic market than the United States, so it relies more on exports. “Brazil’s share of the export market is on track to keep growing in 2018 as it gears up for a crop of around 114 million tonnes, matching last year’s all-time-high production,” said Reuters. As Brazil’s production expands, the tail end of its marketing season has begun to overlap with the opening weeks of the U.S. harvest season, “the period when the U.S. supply has typically dominated markets.”