Global soyabean hectarage is expected to rise by 4% in 2020/21 mainly due to tentative outlooks for a rebound in plantings of the spring-sown crop in the USA, according to latest projections from the International Grains Council (IGC).
IGC representatives presented their latest estimates for the grains, rice and oilseeds harvested area for 2020/21 at a press conference held on 6 March in London.
The IGC also highlighted current developments which were having an impact on the sector, notably the coronavirus outbreak, the US/China trade conflict and African Swine Flu.
There has been a ‘warming’ in relations between the USA and China as evidenced by heavy purchases of soyabeans by China in the latter stages of 2019. However, in the period since December, demand for US supplies has dried up.
Reports indicate that a number of tariff waivers had been issued to processors by the government of China in early March and, in theory, this could mean they would turn to the USA in coming months. But with Brazil due to come to the market with a record crop, it was probable the USA would remain uncompetitive in the current trade year compared with Brazil even with the removal of the waivers.
The IGC said it was the combined effect of all three factors – ‘uncertainty upon uncertainty’ - that was having the biggest impact on the market.
For soyabeans, production for 2019/20 was down mainly due to a heavily reduced US outturn despite record South American output. However, with global plantings predicted to grow by 4% in 2020/21, to a record of 128M hectares – largely due to a rebound in the USA – production was expected to recover.
The IGC also expected a slight increase in rapeseed/canola world harvested area but this would likely only be to a near-average level following a poor 2019/20 when global production fell for a second year in a row.
There was also disruption in the canola sector with Canada facing heavily reduced exports to the Chinese market due to an ongoing trade dispute with China.
In March 2019, China started blocking Canadian canola imports, citing non-compliance with its plant health requirements.
According to the Canola Council of Canada (CCC), canola seed exports to China were down approximately 70% in 2019 due to trade disruptions, resulting in an estimated C$1bn (US$747M) in lost revenue from canola.
Before the dispute started, China accounted for approximately 40% of all Canadian canola seed, oil and meal exports.
The CCC has requested federal intervention to resolve the dispute.