Record High Production of Soybean

The global soybean market is bracing for a tough year ahead. Analysts expect record-high production in Brazil and reduced Chinese demand to create downward pressure on prices. Adding to the uncertainty are U.S. biofuel policies and potential trade tensions between the U.S. and China, making 2025 a challenging landscape for soybeans.

Indian Farmers Face the Heat

In India, soybean farmers are struggling with prices significantly below the government’s support level of USD 0,59 per kg. Currently, farmers are getting around USD 0,49 per kg. Its a situation that could prompt a shift to alternative crops like pulses or maize. This mirrors a trend seen among mustard farmers who have turned to wheat for better price stability.

Global Production Hits New Heights

The world’s soybean supply continues to grow. Brazil’s production is forecast to climb from 153 million tonnes to 169 million tonnes. On the other hand the U.S. expects a 7% increase to 121 million tonnes. These record harvests are pushing global soybean stocks to an estimated 132 million tonnes, up by 17% from the previous year.

As a result, soybean prices in the international market are hovering at USD 0,37 per kg, their lowest in three months. The surplus supply leaves little room for optimism in the near term, with oversupply being a persistent drag on the market.

China’s Demand Slows Down

China, the world’s largest soybean buyer, is expected to cut back on purchases this year. Analysts believe this drop in demand could exacerbate price pressures. Moreover, trade tensions between the U.S. and China remain a wildcard. Any escalation could disrupt soybean exports, putting further strain on the market.

Biofuel Mandates Offer Limited Relief

Brazil’s upcoming biodiesel mandate, which will increase the blend from 14% to 15% in 2025, could offer some support for soybean demand. However, the additional feedstock required may not fully offset the drop in Chinese demand. Similarly, Indonesia’s plan to raise its biodiesel blend to 40% is expected to benefit palm oil rather than soybeans directly.

Prices in Focus

The global soybean trade is likely to see significant changes. If the U.S. and EU finalize a trade agreement, much of Europe’s soybean imports could shift away from South America to the U.S., creating challenges for exporters in Brazil and Argentina.

In India, refined soybean oil is priced at USD 1,23 per kg, while RBD palmolein stands at USD 1,31 per kg. Degummed soybean oil in the international market is currently trading at USD 1,09 per kg, reflecting global price pressures.

Future Prediction Depends on Time

With record-high production and slowing demand, the soybean market appears to be entering a period of uncertainty. While biofuel policies and trade deals may offer some relief, the overall outlook remains bearish. For Indian farmers and global traders, navigating 2025 will require careful planning and adaptability as they respond to these evolving market forces.





Click here to reach our trading platfrom CMBroker