July 23, 2012

Brazil's 2012-13 soy crop likely up 24% on year

In its first outlook on next season, local analyst firm Safras e & Mercado revealed on Friday (July 20) that Brazil's 2012-13 soy crop that will begin planting in September is projected to put out a record 82.29 million tonnes, which would be up 24% from the current crop.

Safras said planted area should grow by 8.4% to 27.22 million hectares next season. Such expansion has not been seen on Brazil's soy belt for almost a decade. Tougher environmental oversight and rising land prices have slowed expansion in frontier areas.

But the record price of soy, the weaker Brazilian real against the dollar and the drought over the world's leading soy producer -- the US have offset these restraints.

Safras' president and lead analyst, Flavio Franca Jr, said the perspectives for strong soy prices have induced local growers to take greater risks this year and push ahead with expansion.

The analyst's first forecast of the next crop was based on average yield numbers over the past five years and normal weather conditions. Drought erased more than 10 million tonnes of productive potential from Brazil's current soy crop, which Safras estimates reached 66.33 million tonnes.