March 20, 2008

Brazil 08/09 soy acreage to increase by 10 percent

Brazil could increase its 2008/09 soy acreage as much as 10 percent from the previous year due to high soy prices, according to the Brazilian Agribusiness Association on Wednesday.

Soy acreage will increase as global consumption rises, with China and India forming the bulk of the demand, according to Carlo Lovatelli, president of the agribusiness association.

Lovatelli assured that the new soy acreage would not cause deforestation, as there are a lot of available pastures and the expansion would be mainly over degraded pastures.

Yields for 2008/09 are expected to increase and soy exports revenue are estimated to rise by 30 percent to BRL 16 billion (US$9.3 billion) in 2008, said Lovatelli.

Brazil's current soy crop is estimated at a record 59.6 million tonnes, up 2 percent from 58.5 million tonnes last season, according to the National Commodities Supply Corp. (Conab).

Conab had also estimated soy acreage to reach 21 million hectares in 2007-08. It is a very slight increase from 20.7 million hectares in 2006, as soy prices did not go any higher before the planting decision was made.

Lovatelli said Brazil's role as a major soy producer has grown as the US, the world's largest soy producer, has been dedicating more acreage for corn in order to supply the ethanol industry.

Brazil is the world's no.2 soy producer after the US.