April 14, 2006

Brazil's soy output falls as farmers face financing difficulties
 

Soy production in Brazil is expected to decrease marginally this year as farmers encounter difficulties from banks reluctant to provide loans, US Foreign Agricultural Service said.

The service revised its previous forecast slightly downward to 56.9 million tonnes in its latest report as planted areas for soy went down almost 4 percent from the 21.9 million hectares last year as a result of the tight credit situation.

Smaller harvests in Brazil is expected to prop up prices in the US which have declined 8.6 percent this year.

Some 2,000 producers are now defaulting on their loans in Brazil's agricultural state of Mato Grosso, according to the service. 

The situation is fuelling discussions about a state of emergency being declared to bring debt relief to farmers.

The service also revised Brazil's soy exports downwards by 20 percent to 21 million tonnes for 2005- 06. The revised figure is still higher than the 19.5 million tonnes exported the previous year.