South Africa's shipping of its first bulk soybeans export to China last month, marked a significant milestone in the country’s growing soybean industry.
This is according to Agriculture, Land Reform and Rural Development Minister Thoko Didiza, who just over a year ago signed a protocol for the export of soybeans to China.
"The successful shipment is a testament to the possibilities of growing the cereal and oilseed sector through successful collaboration between the government and private sector.
“The transaction also perfectly aligns with the objectives of the Agriculture and Agro-processing Master Plan (AAMP) and the recently-concluded BRICS Summit commitments," Didiza said.
China is the biggest consumer and importer of soybeans in the world. This year it was expected to import 97 million tons of soybeans, compared to South Africa’s export potential of less than one million tons. The ability to access this market brought unlimited export potential and growth for both emerging and established farmers in South Africa.
According to the Department of Agriculture, Land Reform and Rural Development, beyond the Chinese market it has worked with industry bodies, including the SA Cereals and Oilseeds Trade Association and Grain South Africa, to open access to markets such as Indonesia and Egypt, among others.
Didiza said opening new export markets helped generate foreign earnings for farmers, which directly benefits the rural economy – an area that the government has committed to develop – and attract private investments and create rural and farm jobs.
"Soybeans are an ideal crop for emerging farmers since they add 50% or more value for the same hectares planted compared to maize. In partnership with private sectors, the state already promotes soybeans and has introduced them in development projects that are supporting emerging farmers," Didiza said.
In this regard, data released by the Crop Estimates Committee last month paints a positive picture, indicating that South African farmers intend to plant a total of 4.47 million hectares of summer grain and oilseed in the 2023/24 season, up 2% year on year (y/y). Surprisingly, the soybean area plantings could fall 7% y/y to 1.07 million hectares.
According to market research firm IndustryARC's Soybean Market Overview, the soybeans market is estimated to reach $259 billion (R4.9 trillion) by 2030, growing at a CAGR of 4.4% during the forecast period 2023-2030.
Soybeans are an edible high-protein plant food and are used to make flour, oil and other food products. Health-conscious consumers were widely opting for low-cholesterol soybean meals and low-fat food substitutes due to their wide variety of health benefits, the growing livestock market, and awareness about the benefits of protein-enriched diets among economies.
IndustryARC said the global bulk shipping of soybeans and increased R&D activities to produce sustainable soybeans were set to drive soybean market growth.
Last year, Trading Economics stated that the US, Brazil, Argentina and Paraguay were the biggest producers and exporters of soybeans in the world, concentrating more than 80% of total production and 90% of total exports. China was the biggest importer of soybeans (60% of total imports) followed by the European Union, Mexico, Japan and Taiwan.
Meanwhile, the FAO Food Price Index (FFPI), released on Friday, averaged 120.6 points in October 2023, down 0.7 points (0.5 percent) from September. This continued the downward trend and stood 14.8 points (10.9 percent) below its corresponding value a year ago. The slight drop in October reflected declines in the price indices for sugar, cereals, vegetable oils and meat, while the index for dairy products rebounded.