Soybean

Global Soybean Market Outlook

• The global soybean supply witnessed a steady growth of 2.9% CAGR during 2014–2020 crop years. The crop supply for 2020-21 is expected to improve by 9.8% against the current crop year 2019-20.

• The versatility of edible forms and nutritious value act as growth drivers for the global soybean market. As consumers shift toward diet-conscious regimens, soybean offers a perfect substitute for meat, dairy, and poultry-intensive diets. 

• The soybean market is exhibiting stable growth, despite the cut in the demand for biofuel amidst the COVID-19 crisis. The competitive price of soybean oil, compared to that of palm and sunflower oil, coupled with the potential demand growth for biofuels and increasingly conducive environmental norms, indicate substantial opportunities for the further growth of the global soybean market. 

Global Soybean Market Trends

The demand for soybean by-products such as oil cakes, soybean meal, and others has been surging over the last couple of years. The umpteen nutritional profile of the products has triggered their popularity among consumers. The rising discrete income of consumers in developed countries regions coupled with the better soybean productivity in these regions has fueled the demand for soybean by-products. 

Moving forward, soybean meal accents a distinct composition of amino acids and can be used as a substitute for cereal proteins. As such, soybean meal is utilized as a feed for human and animal consumption as well.  

Global Soybean Market: Drivers and Constraints

Drivers

The prevalence of cardiovascular diseases (CVD) is influencing consumers to increasingly turn to healthier cooking oil alternatives. CVDs are a leading cause of mortality in the developed regions, especially in the US. Health-centric consumers are looking for heart-friendly and low bad cholesterol substitutes to traditional cooking oil. 

Even though substitutes such as olive oil pose a threat to the soybean market outlook, manufacturers are scaling up their production appetites to distribute their offerings at competitive prices. 

Constraints

One of the key challenges for the global soybean market is grain price fluctuations due to climate variations. Uncertainty in the seasonal and climate changes affects the crops due to uneven rainfall patterns and thus directly affects the manufacturing of soybean.

Various studies have associated soy food items with potential side effects such as cancer risk, menopause symptoms, and risen cholesterol levels. Moreover, soy allergy is one of the most prevalent food allergies, especially in infants and toddlers. While in some cases, the allergy recedes during infancy, in worst cases, the issue persists through adulthood.

Contract Structure

• Large buyers, such as crushing mills (~85–90% of the global soybean supplies) procure soybean in three months contracts.
• The feed and food industry buyers are small-scale buyers and usually opt for medium to long-term contracts.

Price Benchmarking

• Soybean prices and contract structures are majorly fixed by the suppliers using CBOT futures. The basis and freight costs are added to the CBOT prices based on the destination. Usually, the basis is calculated as the difference between cash and futures prices.
• The profit margin depends on the time of buying and selling, which is driven by the supply scenario of the given crop year.

Global Soybean Supply–Demand Analysis

• In 2017/2018, the total global production was estimated to decline by 4%, and consumption was expected to increase by 4% compared to the previous year.
• The US and Brazil remain the largest soybean producers, accounting for about 70% of the global production.

Global Soybean Trade Dynamics

• Brazil and the US are the largest soybean exporting countries, accounting for about 86% of the global exports, followed by Argentina, Paraguay, and Canada. Increased income levels and consolidated supply are expected to support 20–30% growth in the soybean and its derivatives trade in the next 10 years. Latin America (LATAM) is expected to lead the trade growth in the upcoming years.
• From 2013–2014 and 2017–2018, the global soybean trade grew at a CAGR of 7.8%, and the trend was expected to continue during 2018–2019.
• The top soybean importers are China and the European Union (EU), accounting for ~74% of the global imports followed by Mexico, Japan, and Taiwan.

Procurement Insights

Best Sourcing Months

• Based on the seasonality of soybean, the prices of soybeans are expected to witness the lowest levels during October, November, and December in the crop year.

Best Sourcing Regions

• The best sourcing regions for soybeans are the US, Brazil, and Argentina
• Although the prices of soybean are the lowest in Argentina (this is due to currency devaluation), there are a lot of political uncertainties in the country, which limits the sourcing preferences. Brazilian soybeans are the most expensive, and hence the US is a viable option to source soybeans

 Benzoic Acid Supply Scenario Contract Structures

• Soybean prices and contract structures are fixed by the US suppliers by adding CBOT Futures, basis, and freight costs. Basis is the difference between cash and future prices. Profit margin depends on the time of buying and commodity selling

Why Should You Buy This Report?

This soybean market report comprises first-hand insights, quantitative and qualitative analysis by research analysts, and inputs from industry participants and experts across the value chain. The report offers a comprehensive assessment of macro-economic indicators, parent market trends, and deciding factors coupled with the market attractiveness based on segments and sub-segments. It outlines the major market forces influencing the soybean forecast across various geographies. Furthermore, this research study sheds light on the key technology trends and development taking place in the global soybean industry.