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September 24, 2013

For First Time Brazil will Export more Soybeans than Crush

Even though Brazilian farmers produced a record large soybean crop in 2012/13, the amount of soybeans crushed in 2013 has been the lowest since 2009. According to the Brazilian Vegetable Oil Processors Association (Abiove), from February to the end of July, Brazilian processors crushed 19.3 million tons of soybeans which was 7% less than during the same period last year (20.8 million tons).

For the first time, Brazil is set to export more soybeans in 2013 than they will crush domestically. Droughts during 2012 in both South America and the United States led to record low supplies of soybeans and record high soybean prices. As a result, processors had a difficult time passing along the higher cost of meal and oil to domestic users. Therefore, Brazilian processors decided to reduce their crush and export more of their soybeans.

A similar pattern has been observed for crushers in the U. S. that reported the lowest August crush since 2009.

Domestic tax issues in Brazil also helped to propel more soybean exports. Abiove recently increased their estimate of Brazil's soybean exports in 2013 to 40.5 million tons compared to their prior estimate of 39.0 million tons. Processors in Brazil are expected to crush 35.9 million tons in 2013.

Of the 5.5 million tons of soybean oil destined for the domestic market, 3.5 million tons will go toward cooking oil and 2.0 million tons toward biodiesel and industrial uses.