Twenty days away from the harvest of corn and soybeans in Argentina, a strike of truck drivers is about to come. The Federation of Argentinean Transporters demand an update of 28 percent of the freight costs. They argue that they need this update because the inflation of last year.
The corn and soybean exports that happening through the North Arc of Brazil – that encompasses the ports of Itacotiara (Amazonas), Santarém (Pará), Vila do Conde (Pará), Itaqui (Maranhão) and Salvador (Bahia) – jumped from 13 million metric tons in 2014 to 20 million metric tons in 2015, which is a 54 percent growth. These ports used to ship about eight percent of the total grain exports of the country, but now jumped to 20 percent. The data is from Brazil’s Ministry of Agriculture, Livestock, and Supply. The relevancy of this is that farmers avoid more cost avoiding the miles that would have to go over to get to the ports of Santos or Paraná in the South and Southeastern parts of the country, partly using waterways.
The harvest of soybeans in the Braizilian state of Paraná reached 17 percent of a surface of 1.3 million acres. From last week, there was a jump of 13 percentage points. According to local authorities, 83 percent of the crop is in good conditions. Of those beans still in the field, 44 percent are at maturation stage and 40 percent on fructification.
During the last two months, Argentina has exported 627,632 tons of low-protein wheat and 614,985 of wheat for conventional bread. With a more open trade policy with the new government, the country has accessed 14 different markets: Brazil, Chile, Indonesia, Malaysia, South Korea, Taiwan, Thailand, Vietnam, Bangladesh, Morocco, and South Africa.
According to Luiz Pacheco, director of Trigo & Farinhas consultancy, these exports are also a result of a very poor crop. “This is the worst crop in terms of quality of the last nine years,” says Pacheco.
The soybean harvest in the Brazilian state of Mato Grosso advanced 4.5 percentage points last week, but just reached 8.2 percent of the projected surface, according to the Mato Grosso Institute of Agricultural Economics (Imea). Farmers took advantage of an interval of the rainfall that happened throughout last week. Yet, there is a delay of 2.1 percentage points comparing to the same week of 2015. On the other hand, the weather has been improving and the harvest progress has confirmed the most optimistic forecasts.
The Rural Institute of Technical Assistance of Rio Grande do Sul reported that the state advanced the corn harvest to 21 percent of the total planted surface. In some regions, the yields overcome 10 tons per hectare, according to the Institute. The temperatures recently in the southern-most state of Brazil have favored the crop development and most conditions are considered to be good.
Precipitations in the Brazilian state of Bahia in the end of December and early January have improved significantly the conditions of the soybean crops, according to local agronomists. With the return of rains, there will be just a slight a small reduction of the soybean surface, even though there was 10 percent of replanting of the soybean area.
A few farmers in Brazil already started to plant the second corn crop and some analyst have an optimistic forecast that the planted area will grow by 10 percent. The estimate of Brandalizze consulting says that the surface will increase at least 1.2 million acres (or 500,000 hectares). Analysts explain that the domestic prices have pushed the increase. According to the Center of Advanced Studies on Applied Economics of the University of São Paulo (Cepea), the devaluation of the country’s currency, the Real, contributed for more exports and, therefore, a shorter stock of the cereal at the national market (now at 10.02 million metric tons). The value nears R$ 43.46 the bag of 60 kilograms.
The Brazilian Administration Council for Economic Defense has opened an investigation to verify if there is a price fixing scheme involving production and the distribution of wheat flour in North and Northeastern Brazil. The companies cited are multinational Bunge and five other local mills (oinho Dias Branco S/A Ind. e Com. de Alimentos, Grande Moinho Cearense S/A, Moinho Cruzeiro do Sul S/A, Moinhos de Trigo Indígena S/A – Motrisa, J. Macêdo S/A and Ocrim S/A Produtos Alimentícios).
According to the council, there is evidence that the accused companies have organized to fix prices of production of wheat flour and final prices at the distribution limiting competition. If condemned, the companies can pay fines from 0.1 percent to 20 percent of their revenues.
Brazilian consultancy AgRural released a new survey that reveals that the soybean harvest in Brazil reached 1.5 percent of the projected surface. The harvest is considered to be very slow because of the high moisture in the Center-Western states. In the country’s top producing state, Mato Grosso, the works are under 3.6 percent of the planted area, which half of the progress registered at the same period of last year.