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Photograph by Marco Verch, www.flickr.com.

The impact of COVID-19

on soya bean markets

By Ikageng Maluleke, Grain SA

he COVID-19 pandemic has increase logistical restrictions and have banned grain and oilseed exports to
plunged the world into a protectionism, short-term food shortages non-European countries, creating supply
global health crisis. Most will become a reality. In the long term problems. India has also further disrupted
countries are under lockdown, expectations are that global economic the animal feed supply chain with the
T while some are slowly recessions will have a negative effect partial closure of its international ports.
easing regulations and getting back to on the value of food commodities. The soya bean crush pace picked up
normal. However, it is no secret that the substantially in February and March in
pandemic is changing market dynamics, Global production the United States (US), which remains
bringing with it a lot of uncertainty. Looking at global soya bean production a hot spot for soya bean use as exports
It is still not known what COVID-19’s for 2019/20, it is expected that production continue to disappoint. However, an
impact will be in the long term. In will drop by around 7% compared to the expansion in crushing activity in the
the short term, however, the main 2018/19 season, owing to a downgrade in US may be hampered by the decline
concern is the impact of lockdowns prospects for South America. Soya bean in demand from the animal feed
and trade barriers on grains and yields in some parts of Brazil and Argentina sector, locally and internationally.
oilseeds. For instance, earlier in the came out lower than expected following There has been a decrease in the
year Argentinian grain trucks were extended periods of hot and dry weather consumption of fish and meat globally,
blocked and soya beans could not during critical stages of development. therefore reducing demand for grains and
reach crushing plants or international oilseeds. It is estimated that the demand
markets. Argentinian exports only Global consumption for soya bean for animal feed will decrease
picked up again in late March. In light of the COVID-19 pandemic, by 6% in countries such as Vietnam,
Lockdowns are making it difficult for the animal feed sector is facing major Thailand, Malaysia and the Philippines
trade to occur seamlessly. If countries challenges; countries such as Romania this year. The animal feed sector is

28 June 2020