Due to drought, Paraguay cuts its soybean production projections by up to 40%

RIO DE JANEIRO, BRAZIL – The drought is also having a strong impact on neighboring countries. This is the case of Paraguay, where it is estimated that there could be up to 40% less than the 10 million tons of soybeans projected by the Ministry of Agriculture.

According to official estimates, the nation would reach between 6 and 7 million tons. This news is relevant for the international market since Paraguay is the fourth largest oilseed exporter.

Paraguayan Minister of Agriculture, Moisés Bertoni, explained: “The estimate of 10 million tons of soybeans was made based on an average of 2,840 kilograms per hectare, but those yields will not be reached. It could reach 6 or 7 million depending on the probability of rains we have”.

Even in some Paraguayan localities, such as Santa Fe del Paraná, some producers reported 70% to 100% losses in some lots.

A CONTINGENCY PLAN

Given the water deficit affecting crops, the official assured that they are preparing a “contingency plan” to be applied in advance, unlike other similar crises in 2015 and 2019.

Among other things, the initiative seeks to help more than 20,000 small producers. It establishes a cut in the first quarter corporate income tax and debt refinancing lines through the state-owned Banco Nacional de Fomento, among other official agencies.

On the other hand, in Argentina, the Minister of Agriculture, Julián Domínguez, requested this Tuesday to the Chief of Cabinet, Juan Manzur, to increase the resources allocated to the National Emergency Fund to “respond to the claims of the producers” given the drought that is affecting some areas of the country.

NUMBERS

It is worth mentioning that soybean and its by-products are Paraguay’s main export item. Therefore, this situation generates an excellent concern for the Government since it will affect the whole national economy beyond the agricultural sector, according to Bertoni.

In this regard, the official said: “Simply by looking at the behavior of the agricultural GDP and the national GDP, we see that they are two almost parallel lines that go up and down according to the performance of agriculture. A bad agricultural year affects the whole economy of the country”.

Also, “La Niña” will continue until March, and “extreme temperatures” are expected for this week.

It should be noted that, in recent years, Paraguay exported to Argentina some volumes to improve the protein level of the grain. Also, most of that cargo goes through the Paraná River, which during 2021 suffered the worst low water level in the last 50 years.

Some 3.7 million hectares of soybean are planted every year, of which 1,090,000 correspond to the early harvest sown between late August and early September, which is currently the most affected by the water shortage.