September 6, 2017 / 8:18 PM / a year ago

UPDATE 1-Brazil's Abiove sees record 2018 soy exports

(Adds details from Trigueirinho interview, more data)

SAO PAULO, Sept 6 (Reuters) - Brazil is expected to export a record 65 million tonnes of soy grains in 2018 although the country's overall output may fall, industry group Abiove said on Wednesday in its first forecast for next season.

"With a good harvest and China's demand growing, Brazil will have the opportunity to export more," Fábio Trigueirinho, Abiove general secretary, told Reuters by telephone.

Brazil could draw from existing stocks to fulfill next year's export forecast, he said.

The association also estimated domestic soy processing will reach 43 million tonnes next year, 1.5 million tonnes above the forecast figure for 2017, due to an expected increase in domestic demand to produce biodiesel from soy.

Demand will likely increase as the government is slated to raise the percentage of biodiesel that is mandatorily blended with diesel, Trigueirinho said. Brazil currently mandates 8 percent biofuels in the fuel mix. The percentage is slated to rise to 9 percent next year and 10 percent in 2019, but Abiove thinks the government will accelerate that schedule.

The 10 percent requirement could be moved up to as early as March 2018, and Abiove expects the government to make an announcement on the matter imminently, he said.

Abiove's bullish forecasts signals Brazil is on track to remain the world's largest exporter of the oilseeds.

Brazil's soybean exports will generate $23.4 billion next year and when including soy oil and soy meal exports, the total will be $29.4 billion, Abiove said.

Earlier in the day Abiove -- whose members include Archer Daniels Midland Co, Bunge Inc, Cargill Inc , Louis Dreyfus Corp and Brazil's Amaggi SA -- predicted a 4.65 percent fall in Brazil's soy output to 108.5 million tonnes in the 2017/18 crop cycle. (Reporting by Roberto Samora; Writing by Ana Mano; Editing by Chizu Nomiyama and Sandra Maler)

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