South America Calling

Brazilian Soy Exports To Decline $7.3 B In 2015

Depressed prices will cause Brazilian soy complex export revenues to decline $7.3 billion in 2015, the Brazilian Oilseed Industry Association (Abiove) forecast.

The decline is bad for Brazil's trade balance, which has been propped up by agriculture -- and more specifically soy -- in the last couple of years.

Abiove predicts bean, meal and oil revenues will drop 23% to $17.8 billion next year, despite a larger crop.

The association, which includes the main international trading companies, estimates Brazilian soybean production will rise 5.4% to 91.0 million metric tons. The forecast is at the low end of local consultant predictions, which reach as high as 96 mmt.

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Soybean exports are seen rising 5.5% to 48 mmt in 2015, while crushing is also expected to rise 5.5%, to 38.3 mmt.

One shadow still hangs over exports in 2015: The continued wrangle over whether soy exporters should collect royalties on beans containing Monsanto's Intacta RR2 Pro.

Exporters collected on Roundup Ready, but Abiove is pushing back on collections for Intacta, saying it is only willing to do no more than monitor bean purchases.

The situation has arisen because, unlike in the U.S., Brazilian farmers can produce seeds from their own previous year's crop.

Up to 500 buyers of soybeans have already agreed to charge royalties across Brazil, normally in return for a fee, Monsanto says.

But the major players are represented by Abiove.

According to industry executives, an agreement will eventually be reached as it is in neither sides' interest to impede the flow of soybeans out of Brazil when harvesting starts in January.

Intacta was planted commercially for the first time last year and will account for between 15% and 20% of the crop in 2014-15, analysts say.

Back in 2002, Monsanto threatened to embargo Brazilian soybean shipments at foreign ports, on charges of piracy, if exporters refused to collect Roundup Ready royalties. Surely, nobody is inclined to see that happen in 2015.

(AG)

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