Soybean Meal Prices (Q1 2022)
In China, the soybean market reached 3638 RMB/MT in the second week of January 2022, rising by 3.29% from the starting of the month. With the approaching of the Spring Festival, the soybean meal demand in the animal feed industry increased. The average meal spot prices reached 4008 RMB/MT in February after the Spring Festival. The prices rose further to 4100 RMB/MT as a result of crop failure in South America due to weather disruptions. In March, the prices reached record highs, rising to more than 5000 RMB/MT. Low inventory and tight supplies led to the price hike in the region.
The soybean meal futures in March reached a 7-year high as Argentina, a major shipper, suspended export registrations to protect domestic market. In Argentina, traders were suspended from registering soybean meal for export followed by a tax high on shipments to prevent farmers from pre-empting price hike with a surge in sales.
Soybean Meal Prices (Q4 2021)
In China, the price was low in the final quarter of 2021 even though the country had paid high prices on imports in previous quarters. The demand in China had lowered in the final quarter which led to a fall in its price. This was due to reduced consumption of pork as the coronavirus spread in the country and people stopped going out. Even by the end of the quarter, the price continued to be high in India as production levels were significantly lower when compared to those in the previous year. Despite increasing the production, the farmers controlled the supply of the product, anticipating a rise in price which in turn affected the poultry industry. Increased demand, high labour costs and shortage of raw materials also drove up the price. In India, the price ranged from 700 USD/MT to close to 900 USD/MT from September to December 2021. In Indian government, imposed limits on stocks of soybean meal to control the rising price of the commodity in the region to protest the interests of poultry farmers. Later the government allowed its imports from Argentina and Brazil to satisfy the domestic demands and as well as dip domestic prices.
In the final quarter of 2021, the price in Europe had dropped to 442 USD/MT as its production stabilised in the region. Ukraine and Russia emerged as the major soybean meal producers. However, the demand remained low in the region.
In the US, the price plummeted to as low as 313 USD/MT due to the high supply levels and stockpiles in October 2021. China, a major importer of the product, switched to other alternatives to feed hogs and therefore reduced its imports which in turn brought down its price globally. The reduced demand from China also added to the reasons for the price fall. However, the demand in China is forecasted to increase in the upcoming year of 2022.
In Brazil, the price started to drop after mid-October, due to lack of demand and remarkably high production in the country. By the third week of December 2021, prices had dropped by almost 21% (by 112 USD/MT) even though the crops suffered due to dry and cold weather conditions. Argentina, at the same time, emerged as a major exporter to China, as Brazil failed to keep up.
Soybean Meal Prices (Q1-Q3 2021)
China relied heavily on imports of soybean meal from the US, Brazil and Argentina as demands for feedstock increased in the country. Corn prices were soaring, which also increased the demand for the product and drove up its prices. In the second and third quarters of 2021, prices jumped by more than 60 % in India due to the growing shortage, calling for imports. Bangladesh restricted its soy meal exports to India to satisfy the domestic demands which also elevated the prices in the region. Farmers also held back their stocks of soybean meal, the prices of which continued to go over the roof for the most part of the year 2021 until the government intervened at the end of the third quarter by allowing its imports from overseas.
In January 2021, the price continued to rise steeply, reaching at 561 USD/MT. However, it came down and remained mostly rangebound in the second and third quarters of 2021 (470 USD/MT), as supplies flourished in Ukraine and the demand for feedstock weakened.
The US was the third-largest exporter of soybean meal in 2021 after Argentina and Brazil. In the US, the price reached as high as 428 USD/MT in the middle of the second quarter over speculations of supply shortages. Another reason for the increase in prices were the high export demands from China as meat consumption levels increased in the country after the pandemic. The US dollar also grew weaker and supply shortages in food commodities along with rising crude prices were reported globally. Corn prices were soaring, which also increased the demand for soybean meal from China and drove up the prices during the second and third quarters of 2021. In the third quarter, however, as supplies flourished the price reduced to 385 USD/MT in August 2021.
The price surged high in 2021 as Brazil and Argentina, the major exporters of soybean products, faced crop damage due to the worsening of weather conditions (La Nina) in the region. Tensions grew in Argentina as harvest was delayed in 2020-21 and Paraguayan farmers held off their crop supply which impacted the soybean crushing industry in Argentina. Prices were fluctuating in Argentina throughout the year in 2021. In the first quarter of 2021, Europe Union imports from Brazil and Argentina had declined as the use of soybean meal was replaced by rapeseed meal made from vegetable oil. However, the demand for soybean products like soybean meal from China drove up the price of the commodity in the first two quarters of 2021 to levels as high as 471 USD/MT in January and 457 USD/MT in May 2021. The domestic demand for soybean meal-based feedstock also increased in Brazil adding on to the surging prices.
Soybean Meal Prices Overview 2020
In 2020, China was the largest producer of soybean meal. Despite this, China experienced its shortage and relied on exports from India, US and Brazil in 2020. In India, the market faced a downward trend in prices in the first quarter of 2020 owing to the fall in demand due to the pandemic of Covid 19 and also considerable supply availability. The market soon picked up pace in the next quarter from March to June 2020 as people regained confidence over consumption of poultry products and the demand for soybean meal used in the poultry industry increased. Prices however again declined by September 2020. In 2020, the government increased the soybean minimum support rate by 4.6%.
The price in Europe was mostly stagnant during the first half of the year rising from 354 USD/MT in the first quarter to 363 USD/MT in the second quarter. In the third quarter, the price began to rise exponentially and by the fourth quarter it was as high as 495 USD/MT. This increase in price was due to the expanding economy in China after the pandemic which increased its demand as supplies were being exhausted.
In 2020, the US was the second highest producer of soybean meal after China. In the US, unprecedented storms (like the Derecho storm) and dry weather conditions affected the soybean crops, which in turn raised its price in the country. The price was around 325 USD/MT. High demand from Asian countries like China also drove up the prices in the US in October 2020. Apart from this, the corn prices in the US also went up, which affected the price for soybean and related commodities. China and US also lifted trade barriers, as China reduced its tariffs on US products putting an end to their two-year trade disputes, and therefore allowing farmers in the US to export their supplies overseas.
The soybean production in Brazil had slowed down in 2020 owing to the bad weather conditions caused by La Nina. By October, the farmers had driven the prices up by refusing to sell their supplies which affected the poultry market. The demand for export to countries like China also drove up the prices. Farmers in Argentina held back their crop in anticipation of the rise in the Argentinian Peso. Despite high production levels and growing demand for soybean products such as meal and oil, farmers refused to send their soybean supplies for crushing. This drove up the price in Argentina to close to 350 USD/MT in October 2020. Argentina and Brazil were the major exporters of the product to the European Union, accounting for around 85% of their imports in 2020.
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Procurement Resource provides Soybean Meal prices for regions around the globe, which are as follows:
About Soybean Meal:
Soybean meal is the by-product of the soybean oil extraction process. It is widely used for its crude protein content. Soybean meal serves as the most important protein source to feed the farm animals. It is also known as a source of metabolisable energy. Sometimes, soybean meal is also prepared from the residue left after oil extraction.
In this process, extraction of soybean oil from soybean flakes is carried out with the help of solvent. In the regions like the US, almost all soybeans (99%) are solvent-extracted. This is considered as the most efficient method as only 1.5% oil is left in the resulting Soybean Meal.
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The displayed pricing data is derived through weighted average purchase price, including contract and spot transactions at the specified locations unless otherwise stated. The information provided comes from the compilation and processing of commercial data officially reported for each nation (i.e. government agencies, external trade bodies, and industry publications).