14 GLOBAL CONFLICT AND inflation have made markets incredibly volatile in 2022. With the Russian invasion of Ukraine sending markets into chaos and many countries still recovering from the impacts of the global pandemic, commodity markets have been on a roller coaster. Despite volatility, global demand for soybeans is strong and continues to grow. Increased demand for poultry feed in the middle east, renewed interest in biofuels in the United States, and strengthened soy food consumption in Asia and West Europe are all driving soybean demand. As the world's fifth largest soybean exporter, Canada is well-positioned to help fill this growing demand for commodity and nonGMO food-grade soybeans. Our incredible growers and a world-leading value chain make us an important supplier of sustainable sources of protein and oil for a hungry world. In 2021 Canadian soybean exports were 4.4 million metric tonnes (162 million bushels), representing approximately 70 per cent of production. Once led by China and the European Union, export markets for Canadian soybeans have shifted over the past four years, with Iran now the largest single destination. With a growing poultry industry seeking costcompetitive feed options and shifting geopolitics, Canadian exports have seen significant growth to the country. CHINA'S IMPACT China is the world's largest soybean market. Recently, Chinese demand has slowed due to continued Covid-19 restrictions, slow economic growth, and a drop in pork consumption. While increased demand is anticipated for the marketing year 2022 - 2023 (September to August), import projections remain lower than volumes seen before the pandemic. Helping to offset lower demand from China is renewed interest in biofuels from the United States, Canada, and other developed countries. Leading the way is renewable diesel, a "drop-in" renewable fuel for diesel engines that can be blended at any level with fossil diesel. Seen as a green solution to help reduce greenhouse gas emissions, significant investment is occurring due to government regulations that favour lowcarbon fuels and major investments by oil companies and private industry. The market potential for soybean oil as a low-carbon feedstock for renewable diesel is significant and is causing a major shift in U.S. soybean demand and an unprecedented expansion of soybean processing capacity. It is estimated that renewable diesel capacity in the United States will reach 6.5 billion annual gallons by 2030. This expansion is driving demand for vegetable oils, including soybean oil, and will change the mix of soybeans and soy products available for export from North America as more soybeans are processed in North America. Demand for Canadian soybeans REMAINING STRONG IN A VOLATILE WORLD Nicole Mackellar FOOD-GRADE SOYBEANS With the global soyfood industry projected to grow 5.6 per cent over the next three years to reach $55 billion, demand for foodgrade soybeans continues to outpace supply. For over forty years, Canada has been a global leader in producing quality, sustainable food-grade soybeans for international markets. With 1.2 million metric tonnes (44 million bushels) produced each year, virtually all of this production is exported to over twenty countries worldwide. While exports to traditional markets such as Japan remain stable, significant growth has occurred in new areas such as Indonesia, creating more demand for Canadian food-grade soybeans. JAPAN Japan continues to be an important market for Canadian food-grade soybean exports. It is the third-largest market for food-grade soybeans and the sixth-largest overall. Soy food consumption within the country has remained stable for the past decade. While some sectors have seen growth, others continue to decline as consumer diets evolve. Tofu remains the largest soy food sector within the country, with 60 per cent of total food-grade soybean usage. The sector has remained stable over the past two years, with the increase in at-home consumption balancing the losses in the hospitality and food sectors. Natto is the second largest soy food sector, making up 20 per cent of the market. It has seen a resurgence over the past two years as consumers look for food options that help keep them healthy and strong. While miso is the third largest soy food sector making up 15 per cent of the market, consumption has been on a declining trend for the past 10 years as consumers look to new products and consolidation in the industry continues over rising costs. Market Development
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