April 12, 2006

 

AgroConsult lowers Brazil's 2005/06 soy crop to 53.5 million tonnes 

 

 

Brazil's 2005/06 soy crop keeps getting smaller, with agribusiness consultancy AgroConsult estimating total production at 53.5 million tonnes on Tuesday (Apr 11).

 

The national yield average should be around 40.9 60-kilogramme bags per hectare, AgroConsult director Andre Pessoa said.

 

AgroConsult released the results Tuesday of a crop tour it conducted in March on more than 1,200 soy fields nationwide, concluding that total production will be nearly 2 million tonnes less than a pre-tour estimate of 55.3 million tonnes.

 

Pessoa said sporadic rainfall, dry weather in pockets of major soy states like Parana, excessive rain in the largest producer Mato Grosso, and a general reduction in fertilisers, pesticides and herbicides led to drastic swings in yields in all states.

 

"Every state we've seen has farms with fields that are going to produce over 50 bags a hectare and other fields, or even a neighbour a few kilometres away, will produce less than 20 bags," Pessoa told journalists at the Brazilian Commodities and Futures Exchange on Tuesday.

 

Asian soy bean rust was also "out of control" in Mato Grosso, Goais, the Sao Paulo-Minas Gerais border and in northern Parana state.

 

"Farmers had to use four to five applications of fungicide to protect the plants," Pessoa said.

 

"That costs them about 15 bags a hectare. In many instances, it just become economically impossible to fight soybean rust," Pessoa said.

 

AgroConsult's estimate follows a 1.4-million-tonne reduction in the 2005/06 crop by the Brazilian government on Apr 5 to 55.7 million tonnes, and a 1.6-million tonne  reduction in private consultancy AgRural's estimate on Monday. AgRural put the 2005/06 total at 54.7 million tonnes, citing the same reasons as AgroConsult.

 

Most bets are on for a drastic reduction in soy planting intentions for 2006/07.

 

"Rising costs in the local currency, logistical costs, and the lack of farm risk insurance is making soy farming a risky venture," said Pessoa, adding that a weak US dollar was also problematic for the sector. The dollar was worth about 2.14 Brazilian reals on Tuesday, down from Monday's close of 2.157 reals.