The Global Oilseeds environment
The record soya bean crop in Brazil of an estimated 155 million tons, with a possible 157 million tons this year, has resulted in downward price pressure and robust farmer selling putting the squeeze on soya bean storage. The drop in Brazilian prices has resulted in a gain in world market share.
This bumper crop assisted the negative impact of a disastrous crop in Argentina due to drought, with some areas either not harvesting or harvesting below one ton per hectare – the crop size is estimated at 22 million tons, down from 44 million tons last season, and a bumper crop of 61,5 million tons in 2013/14.
Argentina's financial position is deteriorating, and the political situation is not conducive to improving the country's stability. Inflation is already excessively high and increasing, and the currency devaluation adds to these concerns.
Global demands for soya beans due to reduced crushing volumes have been a major reason for lower soya bean prices.
The Black Sea region still plays a critical role in the sunflower market. World production of sunflower seed is forecast at approximately 54 million tons, with reductions in Ukraine and increases in Russia in the 2022/23 forecast.
Canola plantings in Australia and Canada will play an important part in price direction, while the European Union (EU) will be increasing supply in 2023/24. Over the last year, the price of canola futures has almost halved. Strong domestic demand is experienced in Canada, and the EU is likely to reduce export volumes.
The local outlook
The record 2,8 million ton soya bean crop estimate for 2023 is certainly very encouraging and should push South Africa towards self-sufficiency. The National Agricultural Marketing Council's supply and demand estimates point to at least 350 000 tons of soya beans available for export to balance the books. Given the constraints in port capacity in the country (Durban and East London) and Maputo, exports are not easy but could be achieved, given the tenacity and appetite for the risk we have seen so far.
In terms of sunflower seed, demand still exceeds supply, and increasing sunflower production and the quality of seed produced in South Africa would be very welcome.
Despite a challenging seed supply situation, a total of 127 500ha (the highest on record) of canola have been planted in 2023 compared to the 123 510ha planted last year.
The Oil and Protein Seeds Development Trust/Oilseeds Advisory Committee presented a very successful Sunflower Symposium in April this year at the CSIR Convention Centre. Topics ranged from increasing production and yields in South Africa to improving quality to meet value chain requirements.
The symposium was thought-provoking and highlighted the role the OPDT/OAC plays in research and the assistance it offers in making the country's sunflower industry more sustainable.
Presentations can be viewed on OPDT/OAC's website.
DR ERHARD BRIEDENHANN