A look at the developments of soybean crushing plants

FUNZANI SUNDANI, ECONOMIST, INDUSTRY SERVICES, GRAIN SA

The news of developing crushing plants for soybeans has been widely welcomed. For years producers have wanted a market for their local produce. Not only would this be a good incentive for the producers, but also a means to grow the soybean industry as a whole. One of the few concerns that may arise from this development is whether the current levels of production would be enough to sustain the running of the plants.

The implementation of these plants may limit the amount of soybeans available for export as local demand will increase. The 160 000 tons of soybeans which is currently available for export this marketing year will most likely be used for local crushing.

If the local soybean supply is insufficient to meet the local demand, it may become necessary to import. Whilst this would not be an ideal situation, it is expected that the local production will be sufficient. The increase in the local demand of soybeans will support soybean prices.

The processors responsible for the operation of these plants maintain that development is on track.

Table 1 indicates the new crushing plants that are operational or under construction and the daily capacity of soybeans for crushing. Based on the crushing capacities above and sufficient demand for soy oilcake and oil, the production of soybeans has to increase to approximately 1, 6 million tons to satisfy the increasing local demand.

Photo 1 and Photo 2 illustrate some of the structures that are underway for the crushing plants. The construction of these crushing plants and growth of the soybean industry will finally give local producers the recognition they deserve for their contribution to the economy. The implementation of said plants will have a very positive effect on the forward and backward linkages of soybean production within the economy.

Producers will have an incentive to plant more soybeans with the security of knowing there is an increased market for it.