U.S. Soybean Meal Sees Steady Gains in European Market
- General News
The U.S. soybean meal export trade to Europe has seen steady gains in the past few years. U.S. soybean meal export shipments during the October-December 2013 period were very strong compared to the October-December 2012 and 2009 quarters, an indication that the European market has become quicker to respond to opportunities to switch to U.S. soybean meal. This year, Europe accounts for 18% of total known sales and shipments of U.S. soybean meal to date compared to 15% for the same period last year.
Several factors play into U.S. soybean meal’s European market gains. During a ten week period from mid-August through the end of October, in response to a continuation in Brazilian vessel delays, South American Free on Board (FOB) levels surged, which left U.S. soybean meal as the cheapest offered, as new crop production reached export channels. Approximately one million metric tons (MMT) of soybean meal export sales were sold to European customers at the beginning of the marketing year, out of total export sales posted of three MMT. By mid-November, FOB prices were easing for both Brazil and Argentina; importers, however, had already programmed U.S. meal into a few European markets through January. Leading European destinations with volume increases from last year are Spain, Italy, and France with Poland and Germany also showing gains. Southern Europe destinations tend to be slightly more favorable because of less competition from domestic rape meal and its byproducts. U.S. shippers are also more closely related to import and distribution programs due to existing relationships with domestic crushers. Thus, when U.S. soybean meal prices are competitive into Europe, but there is not enough availability to satisfy the total demand, shippers are likely to allocate U.S. soybean meal to markets where they can gain the best advantage from a series of shipments rather than scatter cargoes to different ports. Finally, USSEC’s High Impact program has been targeting European markets and customers along with corresponding shippers of U.S. soybean meal who are in the best position to respond to favorable competitive conditions. The objective of High Impact is to facilitate commercial trade by improving customer preference, market access, and supplier – consumer relationships.