More soybean production for Paraguay, less for Uruguay

It’s a tale of two countries in these Latin American nations

Soybeans are harvested on a farm on the outskirts of San Jose, in southern Uruguay in this file photo. The latest market intelligence says that country will produce fewer soybeans this season.

Soybean production in Paraguay and Uruguay are headed in opposite directions, as reported by the United States Department of Agriculture (USDA) attaché in Argentina.

Production in Paraguay is on the upswing, while it’s declining in Uruguay, but each country is faced with particular problems.

For the 2019-20 marketing year, it’s expected Paraguay will produce approximately 10.77 million tonnes of soybeans, according to attaché Benjamin Boroughs in a USDA report released April 15. That would make for a 22.4 per cent jump from the country’s 2018-19 bean production, despite a 10.8 per cent drop in the amount of the area planted, which Boroughs pegged at 3.30 million hectares for 2019-20.

He estimated domestic usage in the current marketing year to increase six per cent at 4.05 million tonnes, and the carry-over to climb 28.7 per cent at 215,000 tonnes.

For 2020-21 Boroughs forecast the area sown to increase to 3.56 million hectares, but production to slip to 10.25 million tonnes.

Although the attaché forecast the landlocked country’s current soybean exports to increase by 36.5 per cent at 6.69 million tonnes, he cited there have been navigation issues on the Parana River due to low water levels. The Parana forms a sizable portion of the country’s southern border with Argentina and carries up to 45.0 per cent of Paraguay’s bean exports. Dredging operations have been underway upstream of the confluence with the Paraguay River, although Boroughs said there still could be sections that would be impassable on the Parana for river barges in the coming months.

Exports for the coming marketing year are expected to retreat to 6.19 million tonnes, domestic usage to be largely steady at 4.05 million, followed by a carry-over of 180,000 tonnes.

For Uruguay, Boroughs reported soybean production to reach 2.30 million tonnes in 2019-20, for seventh in the world. However, he said that’s a 27.0 per cent drop from the country’s production in 2018-19, as the crop has been more expensive to grow in Uruguay. The attaché cited expenses such as fertilizer, chemicals, labour, fuel and land rent as why production has fallen sharply.

Boroughs said there is a small amount of soybean processing in Uruguay, with the vast majority of its soybean exports as whole beans. He reported domestic usage is to fall 19.4 per cent in 2019-20 to 125,000 tonnes, while ending stocks are to balloon from 32,000 to 82,000 tonnes.

Although exports are to drop 28.3 per cent this year, the amount of production that’s exported will stay well above 90 per cent. Boroughs calculated that 94.3 per cent of Uruguay’s 2018-19 crop was exported and that slips to 92.6 per cent for the current year. The great majority of the country’s soybean exports go to China.

In the attaché’s 2020-21 estimates, production is expected to fall further, to 920,000 tonnes while area is to remain largely steady at 2.35 million hectares. Exports are forecast to decline to 2.21 million tonnes and domestic usage is to hold relatively firm at 145,000, leaving ending stocks at 73,000 tonnes.

About the author


Glen Hallick - MarketsFarm

Glen Hallick writes for MarketsFarm specializing in grain and commodity market reporting. He previously reported for Postmedia newspapers in southern Manitoba and the province’s Interlake region.

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