Brazilian and Chinese government authorities are finalizing a protocol setting health standards for domestic processors to export soymeal to the Asian country, André Nassar, president of oilseeds industry group Abiove, said. The health guidelines will allow companies to export and eventually compete with soy processors based in China, something they cannot do now. The change is happening as local processors are required to increase crushing to produce more biodiesel to boost local blending. The added output of soymeal, a byproduct, would need new buyers. Brazil exports a lot more raw soybeans than in meal form, and the industry would prefer a better balance, Nassar said.

Soymeal is used as livestock feed in China and other meat producing nations, and demand for soymeal should rise in China as it restores pork production after an outbreak of African swine fever, Nassar said. Brazil processed an estimated 43 million tonnes of soybeans in 2019. By 2023, processing will grow by an estimated 9 million tonnes as the government raises to 15% the mandatory quantity of biofuel that will be blended into diesel, Abiove projects, from 11% currently.

Nassar said Brazilian authorities were in advanced talks to finalize the health protocol to export soymeal, though no date has been set for its announcement and implementation.

Abiove does not expect China to stop buying soybeans and start buying Brazilian meal once the protocol is in place, Nassar said. “2020 will be the year when we will open new markets. There is still hard work to do to sell products of higher aggregate value,” Nassar said. The European Union buys about half of Brazil’s soymeal, or 8 million tonnes.