June 8, 2006

Brazil's soy farmers delaying seed purchases

Brazilian soy growers are delaying purchases of soy seeds for the 2006/07 harvest due to the financial woes facing farmers, according to Brazil's largest seed manufacturer.

The purchase delays stand as further testimony to the ongoing liquidity crisis on Brazilian soy farms, said Odilio Balbinotti, president of Sementes Adriana, a large seed producer in Mato Grosso state.

"Normally by now we are looking at at least 30 percent to 35 percent of our soy seeds for the season sold to farmers, but this year it's not even half that," said Balbinotti.

Balbinotti said farmers in the centre-west were buying seeds for June, July and August when they normally start buying in February and March. Roughly 35 percent of the seed volume for the 2005/06 crop was sold at this time in 2005, compared with roughly 15 percent as of Jun 2006 in Mato Grosso. Mato Grosso is the no. 1 soy producing state in Brazil and should harvest roughly 15 million tonnes of soybeans, according to official estimates. Brazil is expected to produce 53.8 million tonnes, according to the Agriculture Ministry.

By comparison, Brazil soy growers had purchased 70 percent of the seed volume required for planting the 2004/05 crop back in April of 2004.

"Farmers are holding out for the last minute. This financial crisis really affects the entire supply chain," Balbinotti said.