August 5, 2005

Brazil's soybean planting might fall by one-fifth in 2006

Brazil's soybean planting might fall by one-fifth in 2006 and the purchase of fertilizer and other supplies might drop by half, because of a strengthening domestic currency, according to Blairo Maggi, governor of the country's Mato Grosso state.

Unlike the US, Brazil was unable to easily subsidise producers to keep farming profitable in response to the country's strong real, Blairo said.

He added that a fall in soybean planting and production could cause problems for the country's government, by slowing economic growth.

In 2004, soybeans and soybean products accounted for more than 10 percent of Brazilian exports. Brazil is currently the world's second largest soybean exporter after the US.

Meanwhile, the Brazilian government said planted acreage for all crops in the country, was expected to fall two percent in the 2005-06 agricultural season.