Soybean resale value registers a historical record in Brazil in 2022
RIO DE JANEIRO, BRAZIL – The resale value of soybeans in Brazil has reached a record never seen before. The average price of the sack of the product in the country reached R$180.12 (US$34) in the first days of February, with a weekly variation of 5%, compared to January.
The data are in the report of consultancy Safras & Mercado and were released on Tuesday, February 8. The survey shows that the average cost of grain in December 2021 was R$161.67.
According to experts, the ‘significant’ increase in price in recent weeks is related to weather issues in southern Brazil. Meteorologists say that the region is experiencing the longest drought in 70 years.
“It’s a combination of factors that have not been seen for a long time to cause this terrible drought, with breaks in soybean crops, for example, now starting to affect the urban population,” said agro-meteorologist Marco Antônio dos Santos.
Data from the National Electric System Operator (ONS) corroborates the scenario. According to the most recent bulletin, the volume of rainfall in the southern states of Brazil in February should be 62% less than the historical average for the region for the period.
And the water shortage, and the smaller harvest of the product, already affects Brazilian consumers. The specialist of Safras & Mercado, Luiz Fernando, explains that soybean meal is widely used as a protein base for animal feed, thus directly impacting the cost of red meat, pork, and poultry.
“Soybean meal is the protein base for all animal feed in Brazil. Therefore, the price of all chicken, pork, and beef in the country is directly linked to the cost of soy. And the increase in the price of this input, because of the lower production in recent weeks, is passed on to the value of Brazilian proteins and, finally, being passed on to the final consumer. In short, meat is very expensive also because of soy,” said Luiz Fernando.
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