Soybean: Paraguay, Brazil, and Argentina to produce 20 million tons less

RIO DE JANEIRO, BRAZIL – The international portal China Dialogue, an independent organization dedicated to promoting a common understanding of China’s pressing environmental challenges, highlighted, in its Latin America section, in an extensive material on the climate problem affecting Paraguay, Brazil, and Argentina. It emphasizes that the drought is hitting South America’s crops and economy.

It states that for soybean, the South American star grain, the losses caused by the dry weather range from the most conservative forecasts of the United States Department of Agriculture (USDA), which expects 9.5 million tons less in the three countries, to others more accentuated, such as those of the Brazilian agency AgRural, which estimates that the three countries will produce 20 million tons less.

“Brazil, Argentina, and Paraguay, the three major agricultural producing countries in South America, are going through a prolonged drought and low water levels in their main rivers. It is affecting both crops and river transport of the most important summer crops, with corn and soybeans leading the way,” the portal adds.

Although the scenario may still change, the 2021 and 2022 coarse grains cycle in the three countries could end with losses that will impact their economies with a magnitude that is still difficult to foresee, specialists agree, specifies China Dialogue.

THE SITUATION IN PARAGUAY IS NO BETTER

According to the international media, the weather situation in Paraguay is no better, as explained by the Minister of Agriculture, Moisés Bertoni. “We were doing well until the last weeks of November, but December was very dry, and in January, very high temperatures arrived, impacting soybeans, Paraguay’s main export item,” he said.

The Paraguayan government estimates that the drought cut the expected soybean production by 30%, which means a loss of income of some US$2.5 billion. In corn, the situation is also problematic. “Many producers have opted to give corn to cattle, although we are still waiting for conditions to improve,” Bertoni added.

However, this season’s difficulties are not entirely new. Paraguay, southern Brazil, and northeastern Argentina, a vast region of South America crossed by the rivers that make up the La Plata basin, have been experiencing a severe water deficit for almost three years, with two consecutive summers under the influence of La Niña, according to the portal.

The economic analyst Pablo Herken pointed out that due to the complicated scenario as a consequence of the drought, soybean, one of the main production, industrialization, and export items of the country, is expected to drop 19% in exports due to the expected poor harvest, which will be of lower quality and, therefore, more expensive.

“What would happen is that the fall in the soybean harvest hit other sectors both directly and indirectly, with what is already perceived, the poor quality that will affect the oil and soybean flour industries, because having less quality, they will have to make a larger investment in the purchase,” Herken said.

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