The Brazilian soybean situation and its impact on the world oils market

Abstract

AbstractBrazil has come from obscurity to become the worlds second largest producer and exporter of soybeans. Internal crushing has also expanded rapidly and become more specialized in soybean crushing. In 1978 Brazilian soybean crushing capacity reached about 14 million metric tons (MT). Domestic oil and meal price ceilings and bean export restric‐tions have had a significant effect on the growth in Brazil’s crushing capacity. Since 1975 exports of both soybean meal and oil have received favored export treatment relative to soybeans. Brazil is likely to continue restrictions on bean exports to ensure availability of beans to their crushers. Brazil’s annual soybean production is likely to grow from the 12 million metric tons in 1977 to over 15 million tons by 1982, with exports of 1‐2 million tons. Meal exports are expected to grow by 1‐2 million tons and oil exports marginally from 1978 levels by 1982. The long run soybean production will depend on how much expansion occurs in the Central West, where the soil is less fertile and production and transport costs are much higher. Substantial expansion there will require higher world soybean prices, construction of marketing and transportation infrastructure, and subsidization of input costs.