May 30, 2006

Brazil's centre-west soy market slowdown continues

Centre-west soy farmers' apprehension over a Brazilian government farm aid package has again affected soy marketing in that country's soy belt on Monday (May 29), farmers and brokers said.

"The market for buying and selling soy in Mato Grosso is practically nonexistent," said Diogo Santos, a broker at soy and grain trading firm, Cerealpar.

Mato Grosso is the leading soy-producing state in Brazil, expected to produce over 15 million tonnes of soybeans compared with roughly 9 million tonnes in Parana state, the second biggest producer.

Farmer associations are meeting again on Monday to decide whether to continue protesting low local commodities prices and demanding more government aid. Roads were opened late last week in Mato Grosso and have been opened for the past ten days in Mato Grosso do Sul after a month of prohibiting road blocks by farmers.

"The south and south-east soy industry is sustaining Brazil's soy market volume," said Jaqueline Alves, a broker at brokerage firm Multisafra in Mato Grosso.

"The protests will continue, but will take a different shape," said Rui Prado, president of the Mato Grosso Soy Producers Association.

Farther south, roughly 200 farmers representing soy growers' associations are meeting in Parana to articulate their position against the government's farm aid package, announced last week.

There are no trade blocking protests occurring in the south.