Brazilian soybean farmers are in no rush to sell this year’s crop. A global soybean shortage coupled with high demand and an expected price rise has led farmers to hold onto their beans and wait. Brazil is the world’s largest producer and exporter of soybeans — the U.S. is second — accounting for about 44.3 per cent of the total global value of exports in 2020.
China is the world’s largest soybean importer, using soymeal to feed its growing hog and poultry operations, and fueling demand in countries that grow it. Farmers in Brazil have other reasons for holding onto their soybean crop. Growing political tensions in the nation could decrease the value of the real, the Brazilian currency. La Niña weather conditions will probably increase levels of drought and reduce soybean yields next season.
Brazilian farmers want local processing industries and exporters to pay them more, according to Reuters. This would further augment global soybean prices, which are currently at an eight-year high. The average soybean price in 2020 was $380 bushels per tonne; in the fi rst half of 2021, it became $544 per tonne, according to Global Trade.
In Brazil’s southern states, farmers have sold just over half of their 2021 crop of nearly 25 million tonnes. They still have 12.4 million tonnes of soybeans to sell, according Safras & Mercado, an agribusiness consulting firm in Brazil. Many producers are eagerly hoping prices reach $14 per bushel. One of Brazil’s top soybean states is Rio Grande do Sul. There, farmers sold 62 per cent of their 2021 harvest in August, which is 11 percentage points below the historical average, according Safras & Mercado. By August of 2020, farmers in Rio Grande do Sul had pre-sold about 27 per cent of their future soybean crop and farmers in Paraná, another soybean state, had sold 45 per cent.
This year, only about 12 per cent of both the states’ future crop combined has been committed for sale, according to Safras & Mercado. Brazilian soybean processors are ready to pay more than export markets, desperately trying to get farmers to sell, says Reuters. Soybean farmers benefi ted from high prices in late 2020 and can afford the wait.