August 10, 2012

Brazil will harvest a record grain crop this year at 163.3 million tonnes, an increase of 2% over 2011.

The IBGE's latest forecast, based on July data, is 1.6% higher than the previous projection. The upward revision is due mainly to improved prospects for the corn crop, which is now expected to come in at 71.5 million tonnes, up 27% from last year.

Despite weather-related losses in the first half of 2012, the IBGE expects a bumper corn harvest thanks to improving environmental conditions and an expansion of 9.6% in land under cultivation.

"These numbers reflect the good prices the product is finding in the market, which makes the growers opt for cultivation and increases investment in technology," the IBGE said on Thursday (Aug 9).

Global corn prices are rising due to crop losses in drought-stricken areas of the US. The soy harvest, however, is expected to fall 12.2% to 65.8 million tonnes because of unfavourable weather, while the rice crop is projected to shrink by 14.9% from last year, mainly as a result of less land under cultivation.

Corn, soy and rice together account for 91% of crop output in Brazil, one of the world's leading agricultural producers and exporters.

Half of the 26 crops tracked by the IBGE are forecast to enjoy bigger harvests in 2012, including cotton, up 4.9%; oats, 13.5%; and barley, gaining 15.6%.

The IBGE is projecting declines in output of sugarcane and wheat, among other products.