Soybean stocks continue to rise
recent years, with production to reach 52.6 million tonnes in
2004/05, 15.2 million tonnes more than in 2003/04.
Forecasts from the US department of agriculture predict global soybean production to reach 219.2 million tonnes.
Soybeans represent the starting point for a range of food ingredients - oil, proteins, isoflavones, even milk: products that are enjoying growing popularity on the back of consumer demand for health-positioned foods.
This small increase in production could contribute to less price volatility for soy, which witnessed 15-year highs in recent years.
Investment bank Goldman Sachs predicts the high inventory levels will limit any 'upside price' for soybeans in the near term, despite indications that production may suffer over the next few years.
The bank cites the recent discovery of soy rust in the US, and early indications that the Brazilian 2005/2006 crop may fail expectations, as vulnerabilities to global production.
"However, the record high level of global soybean stocks suggests it would take several years of bad harvests to run down inventories to the point where prices would be significantly pressured to the upside," says Goldman Sachs.
Soy oil and palm oil are, currently, the two most popular vegetable oils on the global food market. Palm oil, second only to soybean oil in terms of global demand, accounts for 28 per cent of total edible oil sales.
