Europe buys US soya for oil re-export

Importers working for EU member states have purchased US soyabeans to crush and export oil back to the USA, trade sources said in a 9 June AgriCensus report.

The sources confirmed the trade or said the unusual market move was “highly possible”.

In a flash sales update, the US Department of Agriculture (USDA) reported old crop soyabean sales of 165,000 tonnes to Spain on 6 June, with market participants believing they were in-house deals aiming to re-export soyabean oil to the USA after the beans were crushed in Europe, the report said.

Large companies could be taking advantage of idle crushing capacity in Europe and high demand from the US biofuels sector to make this cross-border flow economically viable despite the high freight costs involved, the report said.

On 9 June, the USDA announced another round of old crop US soyabean sales, with 197,000 tonnes sold to unknown destinations.

The unusual cross-border trade dynamic could be an ongoing trend, AgriCensus said.

“Depending on tariffs and the certification process, this could be a frequent thing in 2023/24,” Eduardo Vanin, the head of analysis at Brazil’s brokerage Agrinvest, told the news agency.

the Netherlands with 1.172M tonnes, down by around 19% against the previous year’s total of 1.4M tonnes. Italy's imports fell around 38% to 803,000 tonnes in 2022/23; while Belgian imports were down 42% to 100,000 tonnes.

In contrast, Germany imported significantly more palm oil in 2022/23, purchasing 359,000 tonnes – up just less than a quarter compared to the previous year.

UFOP said the downward trend was mainly due to the declining use of palm oil as a feedstock in biodiesel and hydrotreat- ed vegetable oil (HVO) production.

UFOP said EU member states were required to phase out the crediting of palm oil-based biofuels towards national blending mandates or greenhouse gas (GHG) reduction quotas no later than 2030.

In Germany, such crediting had already been disallowed since January 2023 although imports for the processing of exports was still possible. Other member states – including Austria, Belgium, France, Italy and Sweden – had also excluded the crediting of palm oil-based biofuels.

CHINA: Chinese soyabean imports are expected to increase due to the country’s rising demand for soyabean meal and soyabean oil, according to a 5 July report by the United States Department of Agriculture (USDA).

In the Global Agricultural Information Network (GAIN) report, the USDA increased its forecast for soyabean imports in China to 98M tonnes in 2022/23 and 98.5M tonnes in 2023/24.

“The end of COVID-related restrictions, lower prices following a record soyabean harvest in Brazil, and modest growth in the swine and poultry sectors are expected to increase soyabean meal consumption. Higher subsidies in major soyabean producing regions are expected to modestly increase planted area and production in 2023/24,” the USDA said.

Based on a planted area of 10M ha, China is forecast to produce 19.8M tonnes of soyabeans in 2023/24.

“The forecasted area increase, up 0.2M ha or 2% from the previous year, is mainly driven by government incentives encouraging soyabean planting over corn, intercropping, and use of marginal and less productive lands,” the USDA said.

Despite declining soyabean prices and lower profit margins compared with corn, planted area had increased significantly in the 2022/23 marketing year, the report said.