Brazil is positioned to take over most of the world's soybean trade, starting in April as this year's harvest is brought in. This year, Brazil will easily dominate the market because of the drought conditions in Argentina. Currently, the United States is the world's leading grower of soy. Meanwhile, Brazil is in the second positon followed by Argentina and Paraguay.
Brazil's soybeans are already cheaper than soy from the U.S. for upcoming March deliveries, and China has already purchased 610,000 tons so far this year. As a result, there will not be sufficient soy from Brazil to satisfy China's demand alone. Despite the downward economic trends, there is no sign of the Chinese demand for soy slowing down in the slightest.
The beef industry in Brazil has expanded at an unprecedented scale in the last five years to become the world's largest global players. Like many other industries, the beef industry was caught off guard by the world financial crisis and the lack of available credit.
Currently, some of the local beef packers such as Arantes Alimentos and Margen are restructuring under the protection of bankruptcy laws. The industry also has grave concerns about the future of its main market Russia, who has contracted the imports of beef to levels not seen in the last seven years.
The main beef plants in Brazil have capacity to slaughter 4,000 head of cattle per day. Without running at full capacity, there are big losses at the plant before trading begins. However, not all of Brazils meat industry is in trouble. Players like JBS, Marfig and Bertin e Minerva are going strong both domestically and on the global stage. These beef giants may well benefit from the financial crisis and expand their meat plant base, even though no one is currently running at full capacity.