September 7, 2006

Brazil's AgRural sees 7 percent reduction in 2006/07 soy plantings

Brazilian agribusiness consulting firm AgRural lowered its planting estimate for the 2006/07 soy crop to 20.6 million hectares, or 7 percent less than the 2005/06 crop, the company said Wednesday (Sep 6).

Last month, AgRural put its planting intentions at 20.7 million hectares.

This is the smallest soy planted area since 2002/03 when Brazil planted 18.5 million hectares of soybeans.

Most of the field reductions will take place in the centre-west, where low local commodity prices coupled with a weak US dollar and high freight costs have hampered soy growers. Centre-west planting intentions are down 14 percent to 8.9 million hectares compared to the 2005/06 soy crop.

Areas in Mato Grosso where the soil tends to be more sandy and require extra treatment costs are likely to be abandoned in the coming planting season, which begins in four weeks.

Soy fields will also give way to cotton in Mato Grosso and Bahia states, and sugarcane in Goias and Minas Gerais.

In areas where sugarcane and cotton are not options, soy fields are expected to expand by as much as 2 percent in Parana and 1 percent in Rio Grande do Sul. Parana is the second leading soy-producing state and Rio Grande do Sul is the third.

Brazil produced 53.4 million tonnes of soybeans from the 2005/06 soy crop. In a best-case scenario, Brazil will produce 54 million tonnes in 2006/07 under favourable climate conditions, AgRural analysts said.