Brazil soy crushing industry struggles despite record crop

Tue Sep 17, 2013 4:51pm EDT
 
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By Reese Ewing

SAO PAULO, Sept 17 (Reuters) - The crushing of Brazilian soybeans into meal and oil is at its lowest level since 2009 despite a record harvest of 81.6 million tonnes that finished in May, industry specialists said Tuesday.

About 19.3 million tonnes of soybeans were crushed from the start of the industrial year in February through the end of July, down 7 percent from the 20.8 million tonnes crushed over the same period last year, according to the latest data from Brazil's vegetable oils industry association, Abiove.

Abiove General Secretary Fabio Trigueirinho said this year's tally through July included data from all the operating crushers in Brazil, the world's No. 2 soybean producer after the United States.

"You would expect the industry to be doing well in a year when a record harvest had just finished," Trigueirinho said.

Droughts in 2012 that destroyed several millions of tonnes of soybean crops in South America and the United States are part of the reason for the drop in activity. The droughts pushed stocks to record lows and led to persistently high prices for beans, said Lucilio Rogerio Alves, research professor at the agricultural economics think tank Esalq/USP.

Crushers have struggled passing on the high prices for soybeans to customers in the domestic feeds and cooking oils markets, which has made exporting more attractive.

For the first time in history, Brazil is expected to export more soybeans than it crushes domestically this year and is expected to consolidate its role as the world's largest soybean exporter in 2013.

The trend has also touched the United States, where soy processors posted their lowest crush numbers for August since 2009, constrained by lingering supply tightness.   Continued...