May 5, 2006

Brazil to cut 2006/07 soy plantings by at least 5 percent

Brazilian soy growers will reduce planting area again in the 2006/07 soy crop--by at least by 5 percent over current levels--due to liquidity problems, the head of an agribusiness association said Thursday (May 4).

"At this point, 5 percent is a conservative estimate. It could be much more," Carlo Lovatelli, president of the Brazilian Agribusiness Association said.

Soy farmers and soy traders were already expecting a reduction in planted area next year following a 4 percent reduction in 2005/06 area to roughly 22 million hectares because of continuing cash crunch on Brazilian soy farms.

Lower overall production is likely, Lovatelli said, because farmers will spend less on crop inputs in the 2006/07 season, just as they did in the current 2005/06 soy crop.

Brazil is expected to harvest 55.2 million tonnes of soy from the 2005/06 crop, the government said Wednesday.