September 16, 2013
Brazil to replace US as top soy producer
Buoyed by the incentive to farmers provided from resilient prices and a weak real, Brazil is to top the world soy production league for the first time, overtaking the US, whose hopes have been dented by dryness.
Due to late rains which enabled its drought-tested crop to recover above 82.0 million tonnes, the US held on to its record as the top soy producer last season, stretching back to at least the 1960s, beating the Brazilian harvest by a narrow 55,000 tonnes, on Washington estimates.
However, Brazil, which last season did manage to take the crown of top soyexporter, is on track to trounce the US harvest this year.
USDA estimates on Thursday (Sep 5) upgraded the Brazilian crop, which will be harvested early in 2014, to 88.0 million tonnes, 3.0 million tonnes ahead of forecast US output.
The forecasts reflect an expectation that elevated soy prices, coupled with a drop of getting on for 20% in the value of the real against the dollar over the last six months, will encourage Brazilian farmers to lift soy area by 4.3%.
The increases in input prices are lower than the increases in the value of the soy in real terms and higher profits are expected as the real will also lift costs of inputs such as fertilisers and insecticides, which are largely imported.
Many private analysts too have come in with lofty forecasts for the Brazilian crop, with AgRural forecasting an 89.1 million-tonne harvest. However, for the high hopes to be realised depends on successful Brazilian sowing and growing seasons, with planting yet to begin in earnest.
Brazil''s dry weather, stretching into Argentina too, has raised some initial concerns over crop prospects, with Oil World earlier this week saying that conditions were "delaying the start of corn and soy plantings and jeopardising satisfactory germination.