September 25, 2007

 

Brazil new 2007/08 soy crop may hit 63 to 64 million tonnes

 

 

Brazil's upcoming 2007-08 soy harvest could hit a record 63 to 64 million tonnes if there are no major weather problems, up 6 to 8 percent from the year before, the president of the Brazilian Vegetable Oils Industry Association, or Abiove, said Monday.

 

"I'm very optimistic for the upcoming crop," Abiove President Carlo Lovatelli told Dow Jones Newswires in a telephone interview. "There is huge demand for corn in the US due to ethanol, which has reduced planted area there for soy, and pushed up the production here.

 

"Unless there are weather problems, I see an extremely positive year for the sector," he added.

 

In the previous 2006/07 season, Brazil produced a record 59.5 million-tonne soy crop, according to Abiove estimates. This crop is being sold from February 2007 to January 2008.

 

Abiove's current forecast is larger than that of Brazil's government-linked National Commodities Corp., or Conab, which forecast in a preliminary estimate that the country will harvest between 59.1 million and 61.9 million tonnes for the 2007-08 season, up from an estimated 58.4 million last harvest.

 

It is also larger than independent analysts like local agribusiness consultancy Agroconsult, which has pegged Brazil's new soy crop at 62.3 million tonnes, up 6.4 percent from an estimated 58.5 million-tonne crop in the 2006/07 season.

 

The country's s soy sector suffered a few bad years between 2004 and 2006, as local competition eroded due to a strengthening local currency against the US dollar as well as lower global soy prices, among other factors.

 

By late last year, however, climbing international demand for biofuels helped trigger higher prices for grains and oilseeds and reverse this outlook.

 

Despite expectations of an enormous crop, local producers warn that it is still early to talk of guaranteed numbers for Brazil's soy crop, noting that drier-than-usual weather since July in part of the country's centre-south may still take a bite out of the crop's productivity.

 

Brazil is the world's No. 2 soy exporter after the US.