The record Brazilian export figure for the first four months of the year 32.4 MMT (+0.9 MMT/+2.8% y-o-y) masks a significant drop off in April (at 11.6 MMT down 28% y-o-y). Indeed, this is the first time April exports have fallen short of March figures in 25 years. Despite unfavorable weather reducing Brazilian soybean production figures down to around 125 MMT (-14.5 MMT/-10.4%) this year, it may well be that falling demand from China is the principal reason for the April decline.

At 22.3 MMT (-0.3 MMT/-1%), in the four months to date China remains the principal purchaser, but China’s share at 69% is the lowest for the period since 2012. With pig herds in China now restored to pre–African Swine Flu levels, farmers there are now faced with precipitously falling pork prices as domestic demand has been choked off by extended lockdowns in several principal cities. The response from farmers has been to consider cheaper alternative feed (such as sorghum) instead of more highly priced international soybeans. Whilst lockdowns continue and prices for pork remain low the usual intense demand from China for Brazilian soybeans for the balance of Q2 is unlikely which is perhaps a bearish factor for the Panamax market as this sector is the principal carrier of Brazilian soybeans to China.

Aside from China, Brazil has shipped over 5 MMT (+0.4 MMT/+9% y-o-y) to Europe and Eastern Mediterranean, with Spain at 1.6 MMT (+0.4 MMT/+33%) being the largest importer. Other major importers of Brazilian soybeans include Turkey and Netherlands, both taking in 0.8 MMT each though this is little changed from 2021. Exports to other markets in the Far East have improved; Thailand at close to 1 MMT, the third largest importer of Brazilian soybeans, is slightly up whilst Vietnam at 0.5 MMT and Japan at 0.3 MMT are sharp improvements on 2021 figures after four months. In the Middle East and Subcontinent shipments to Pakistan (0.6 MMT), Iran (0.5 MMT), and Bangladesh (0.4 MMT) in the first four months are also broadly like 2021. Perhaps more surprising is that Brazil’s biggest y-o-y percentage gain at +158% are exports to Russia which at 0.5 MMT are up 0.3 MMT on this period last year.