| SAO PAULO, Sept 17
SAO PAULO, Sept 17 The crushing of Brazilian
soybeans into meal and oil is at its lowest level since 2009
despite a record harvest of 81.6 million tonnes that finished in
May, industry specialists said Tuesday.
About 19.3 million tonnes of soybeans were crushed from the
start of the industrial year in February through the end of
July, down 7 percent from the 20.8 million tonnes crushed over
the same period last year, according to the latest data from
Brazil's vegetable oils industry association, Abiove.
Abiove General Secretary Fabio Trigueirinho said this year's
tally through July included data from all the operating crushers
in Brazil, the world's No. 2 soybean producer after the United
"You would expect the industry to be doing well in a year
when a record harvest had just finished," Trigueirinho said.
Droughts in 2012 that destroyed several millions of tonnes
of soybean crops in South America and the United States are part
of the reason for the drop in activity. The droughts pushed
stocks to record lows and led to persistently high prices for
beans, said Lucilio Rogerio Alves, research professor at the
agricultural economics think tank Esalq/USP.
Crushers have struggled passing on the high prices for
soybeans to customers in the domestic feeds and cooking oils
markets, which has made exporting more attractive.
For the first time in history, Brazil is expected to export
more soybeans than it crushes domestically this year and is
expected to consolidate its role as the world's largest soybean
exporter in 2013.
The trend has also touched the United States, where soy
processors posted their lowest crush numbers for August since
2009, constrained by lingering supply tightness.
Trigueirinho said that in Brazil changes in tax policy have
hurt the industry. "The tax situation is in chaos right now and
that is part of the problem."
He said that after the government lifted the so-called
PIS/Cofins social-security and payroll tax early this year from
the cooking-oil industry, the industry was left holding large
amounts of worthless tax credits that it had previously been
able to use against other tax liabilities.
Of the roughly 5.5 million tonnes of soyoil that is consumed
on Brazil's local market, 3.5 million tonnes serve as cooking
oil and the rest is sold for use in the biodiesel industry.
Brazil also exports about 1.3 million tonnes of soyoil per year,
according to Trigueirinho.
Abiove recently raised its bean export estimate to 40.5
million tonnes from the 39 million it forecast in June, while it
lowered its crushing estimate to 35.9 million tonnes from 37.2
The cost of idle capacity at crushers both in Brazil and the
United States will likely weigh on the bottom lines of the major
multinational grain trading and processing companies. Bunge
, Cargill, ADM, Louis Dreyfus and Noble operate on
Brazil's grain belt.