Market Trends of Soybean Industry
This section covers the major market trends shaping the Soybean Market according to our research experts:
Increased Demand for the Byproducts of Soybean
The demand for soybean by-products like soybean meal and oil cakes increased over the past few years. The high nutritional value of the products enhanced their popularity among consumers, and it is increasing the market. The increased disposable income of consumers in developed countries and the improved soybean productivity in these countries contributed to the demand for soybean byproducts. As per the USDA, in 2020, soybean oil production in the United States was recorded at 11.3 million metric ton, increasing from 10.8 million metric ton in 2018. The demand for soybean oil in the country contributed to the production of commodities, which is anticipated to drive the market during the forecast period.
Along with this, soy lecithin a by-product of soybean is a popular food ingredient because it can be used as a wetting agent, to reduce viscosity and crystallization, to manage cholesterol, and to enhance chlorine. It is a food ingredient with significant applications in dietary supplements, ice creams and dairy products, newborn formulae, bread, margarine, and other convenience foods. Furthermore, soybean meal has a unique composition of amino acids and can be used as an alternative to cereal proteins. Additionally, the demand for high-protein animal feedstuffs like soybean meal increased due to the rise in demand for animal protein in quickly developing nations like China. Because growth rates are outpacing increases in yield per land unit over the long run, there is an increasing demand for soybean production. Therefore, soybean meal is used as feed for animals and for human consumption. The main reasons behind the increasing demand for protein-enriched foods are their health benefits and the growing number of livestock, cattle, ruminants, and other animals in the global market.
South America Dominates the Global Export Market
South America is the largest exporter in the global market for soybeans. Brazil, Argentina, and Paraguay account for more than 50% of the world's soybean supply. In South America, Brazil was the largest exporter of soybeans in 2020, accounting for 44.4% of total global exports, followed by Argentina and Paraguay. The soybean production in Brazil accounted for 114.7 million metric ton in 2017, increasing to 121.7 million metric ton in 2020. This increase in production is boosting soybean exports in the coming years. The low value of the Brazilian currency in 2020 made the price of soybeans competitive in the international market. The increased awareness among farmers about soybean cultivation and the well-equipped nature of cultivation in the region enhanced soybean production. The domestic and global demand for oilseeds like soybean has been rising over the years, impacting the prices of soybean and farmers' revenue positively. The US-China trade war contributed to the growing exports from Brazil to China.
Argentina is the world's top soybean oil and meal exporter. For instance, according to the ITC trade map, Argentina exported 6,010,691 million metric ton of soyabean oil in 2021. Additionally, Paraguay is the fourth-largest soybean exporter in the world. According to data from the Paraguayan Chamber of Soybean Exporters the country exports over half of the soybeans it produces, and its economy depends heavily on shipments abroad of raw materials. The enhanced livestock population and the growing demand for soybean meals have improved exports from South American countries in Asia-Pacific and Europe.
