February 28, 2012

 

IGC lowers global soy output forecast by 4%

 

 

Adverse effects by the dry weather in areas of South America have led the International Grains Council to bring down its expectations for global soy output in 2012-13 by almost 4%.

 

Production is forecast at a three-year low of 246.5 million tonnes, down 7.6% from 2011-12 because of lower output in all major producing regions.

 

The IGC tabulates its data over an aggregate marketing year covering all major producing and trading countries.

 

"Adversely dry conditions during the growing season have negatively affected yields in many areas, particularly northern Argentina, southern Brazil and Paraguay," it said in a recent report.

 

In southern Brazil states including Parana and Rio Grande do Sul, low soil moisture has significantly hampered crop development, it said.

 

Brazil's soy output may fall 8% to 69.4 million tonnes from the record reached in 2011-12; down 3.3% from the IGC's earlier forecast, it said.

 

The IGC lowered its forecast for Argentina's soy output in 2012-13 by almost 10% to 46 million tonnes, down 6% from last year's actual production.

 

"Prolonged dryness has resulted in irreversible yield reduction in some areas of Argentina," it said.

 

Paraguay's production may fall by 40% to just 5 million tonnes, it said.

 

Meanwhile, demand is strong.

 

Although the IGC lowered its forecast for China's soy imports by 1 million tonnes, at 56 million tonnes, it would be a record, up 7% from last year.

 

The pace of South America's soy exports from last year's harvest has been exceptionally strong, and shipments from Brazil and Argentina were almost three times higher during October-December than year earlier, IGC said.

 

However, shipments from South America will likely slow in the next few months due to reduced output, it said. The IGC lowered its forecasts for Brazil and Argentina's soy exports in 2012-13 by 2.2% and 17%, respectively, while raising its forecast for US soy exports by almost 3% due to a shift in demand from South America.

 

The global soymeal trade will likely reach a record 58.4 million tonnes, up 2.6% on year, the IGC said, citing rising demand in East Asia and the European Union.