Brazil Expecting a 10% Drop in Grain Crop

Soy plantation in Brazil The 2008/09 Brazilian harvest is forecasted to experience a loss of 5 to 10% compared to the previous record crop of 143 million tons, according to Katia Abreu, president of the Brazilian Agriculture and Livestock Confederation (CNA).

"We estimate a drop close to 10% in the next grain and oilseed crop relative to 2007/08," said Ms Abreu during the CNA annual assessment for the agriculture sector and prospects for the next season.

Ms Abreu pointed out that the main indicators for a crop contraction was an 8% drop in the consumption of fertilizers and a reduced area for corn. The price of fertilizers has soared several times in the last two years.

She also mentioned increasing difficulties to sell the crops, lack of sufficient storage and the credit crunch.

"So far, for example, only 18% of green soybeans have been sold. At this time last year the volume which had been traded had reached 50% of the oilseed crop," underlined the CNA president.

CNA financial advisor Guilherme Dias supported Ms Abreu's statements and concerns about future crops.

"Brazilian agriculture needs to reformulate its financial structure," said Dias adding that the first step is for farmers "to be organized as a modern rural company, capable of surviving the new challenges," which means more transparency in its dealings all along the chain.

"Without transparency it's very difficult to establish a crop insurance system for farmers," he emphasized.

In related news Argentina reported that during the first nine months of 2008, it had exported 22% more soybeans, (in spite of the several month long farmers' conflict), although sales of soy cooking oil and flour derivates had fallen.

The latest release from the Secretary of Agriculture states that 10.5 million tons of soy beans were exported between January and September compared to 8.6 million tons in the same period a year ago.

However soy oil exports were down 12% to 4.12 million tons from 4.69 million tons in the first nine months of 2007.

Argentina is the world's leading exporter of soy oil and flour and ranks third in soy beans. China is Argentina's main client both for beans (7.8 million tons this year) and oil (1.34 million tons).

During the first nine months of this year, Argentina also exported 6.48 million tons of wheat (down 9.5%) and 13.4 million tons of corn (up 5%).

Argentina's grain and oil seed 2007/08 crop reached 46.2 million tons compared to 47.5 million in 2006/07, according to Agriculture statistics.

Mercopress

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