October 4, 2007

Paraguay aims for 10 percent rise in soy production after exports doubles

The 2006/07 production year was positive for the Paraguayan soy industry as crops reached a record level of 6.5 million tonnes, the Agriculture  Ministry announced.

International soy sales doubled to 122 percent on-year in the first eight months of the year to US$860.4 million.

Authorities are setting a 10-percent increase in production as the target for next year, although industry sources say a more realistic goal would have been a 5-percent increase to 6.8 million tonnes.

 Paraguay's soy crops benefited from favourable weather conditions and international demand for the past two years, with soy in the US leading world prices.

During the second quarter, the weekly average price of soy rose nearly 20 percent from a mid-July to the last week of September.

Authorities plan to raise productivity by 3.5 percent and expand soy area by 6.25 percent.

However, analysts cautioned that soy prices is still largely dependent on the US economy and would take a hit should there be a slump.