Data shared by Conecta brokerage, which is based in Asunción, Paraguay, says that the country would produce up to 3.4 million metric tons of corn in this season. Early this week, the harvest of the cereal had reached nearly 25 percent of the surface planted, while approximately 30 percent of the expected production volume is sold. The brokerage estimates final stocks of Paraguayan corn at 1.4 million metric tons by December of this year.
Category Archives: Paraguay
The government of Paraguay has already sent a bill to the Paraguayan Congress that would impose taxes at a rate of 15 percent for all grains exported from the country. President Horacio Cartes believes he has enough votes to approve the measure in an agreement with the leftist opposition. Paraguay, today, is the fourth largest exporter of soybeans in the world with 6.3 million metric tons shipped. The argument of the Paraguayan government is that the agricultural sector has a revenue of over US$ 3 billion, but contributes less than other sectors of the economy. This year alone, the soybean output in Paraguay overcame 10 million metric tons.
In December of 2015, Argentina eliminated export taxes on wheat and corn. The result of the elimination was the doubling of wheat production and generating a growth of two percentage points of corn production. A program of reduction of export taxes on soybeans until its elimination in 2019 was also set.
Paraguay could beat its historical record of soybean production this year, according to local sources. The USDA and local projects put the Paraguayan output at 10.1 million metric tons and consolidating its position as the fourth largest exporter of the oilseed in the world. The local Ministry of Agriculture says that the number of 11 million metric tons can be beat throughout the year with a harvested volume of 10.2 million metric tons already and a second crop.
In a story for the Brazilian online newspaper Gazeta do Povo, some describe the crop as “perfect”. Paraguayan soybean yields are higher than those of Brazil.
After a fall of Paraguayan wheat exports to Brazil in December, but Brazilian consultancy Trigo & Farinhas forecasts a recovery of these exports for three reasons. The first is the start of the Brazilian harvest with “aggressiveness” from the state of Rio Grande do Sul. Secondly, the strike of enforcement agents of the Brazilian revenue service is likely to end this months. Thirdly, the dollar is in a level that is seven percent lower than in December (rated at R$ 3.25), which is more acceptable for importers.
After the victory of Donald Trump in the United States, several emerging market currencies have devalued – not only in Mexico. In the case of two major grain producing countries, such as Brazil and Argentina, this was not different. In the case of Brazil, the Dollar jumped from R$ 3.16 early last week to R$ 3.44. In Argentina, the U.S. currency was worth AR$ 15.26 and closed today at AR$ 15.76.
For Don Roose of U.S. Commodities, West Des Moines, Iowa, the current trend is more purchases of corn and soybeans from South America. “China is now shifting buying to South America,” Roose wrote this morning.
Most analysts agree that in an eventual protectionist wave of the next president of the United States, Donald Trump, China could react by putting import taxes on U.S. grain or just not buying so much U.S. corning, seeking another suppliers such as Brazil, Paraguay and Argentina. Dave Holloway, a trader from the state of Michigan, it could be a problem for the United States if Trump confirms this policy. As candidate, he mentioned a possibility of 35 percent tariff on Chinese products, which was later denied.
“If Trump puts in practice this fight, the prices would increase and three countries [China, Japan and Mexico] would go to Brazil. We are not the only store in town. The Chinese would be happy to help the Brazilian infrastructure,” affirmed Holloway.
For Darin Fessler, a broker from Lincoln, Nebraska, says that “only time will tell about the ability of Trump to negotiate with China or Japan. I think there could be some good changes made to the manufacturing sector and currency side of things,” Fessler told AgroSouth News.
Corroborating with these opinions, Brazilian market analyst Antonio Sartori from BrasilAgro says that is more likely that Trump goes with complaints to the World Trade Organization against China, but that could suffer retaliation too. “China has spent US$ 100 billion with subsidies for corn, wheat and rice growers and this is out of the rules, “concludes Sartori.
The wheat production in the Mercosur countries (Brazil, Uruguay, Paraguay, and Uruguay) may be three million metric tons lower than previously expected, according to a forecast of the Brazilian consultancy Trigo & Farinhas. The total output in that market would now be 18.7 million metric tons.
“For a while, in my judgement, there will be no need to increase the imports [from outside the bloc], because it just reached that Argentina would put in the market. But, as we have two more months of harvest ahead with bad weather forecasts, the volume of deteriorated wheat can worsen,” affirmed Luiz Carlos Pacheco, director of Trigo & Farinhas.
Nearly two million metric tons would be reduced of the previous estimate of Argentina because of floods considering the estimate of the Buenos Aires Cereal Exchange in its weekly report of October 27th and over 250,000 tons of less output in the Brazilian state of Rio Grande do Sul due to frost and hail recently.
The soybean planting in Paraguay is about to start and the surface may grow 13.2 percent from the current 8.1 million to 9.1 million metric tons, according to a report from the United States Department of Agriculture. The exports would also grow in the 2016/2017 season from 8.5 million metric tons approximately to 8.74 million metric tons.
The competitiveness of wheat from different nations in Brazil has been changing. In the case of last week, even with an apreciation of 1.05 percent of the Dollar comparing to the Brazilian Real, the prices of Paraguayan wheat in Curitiba in the state of Paraná had cost R$ 11.62, while the U.S. hard red wheat was priced 1.26 percent less in the port of Santos, state of São Paulo.
An analysis authored by consultancy Trigo & Farinhas reveals that the final price of a U.S. wheat at a mill in Curitiba would reach R$ 934 per ton, which is still well below the Paraguayan price. This means that there is more room for U.S. wheat in Brazil.
Corn exports from Argentina to Brazil during the first quarter of the year reached 58,787 tons – a record. In 2015, no export of the ceral was registered to Brazil in the same period. Experts say that those imports in Brazil happened because the Real was strong in the period, boosting exports and generating scarcity domestically. Paraguay also had the opportunity and exported 78,950 tons in the period. In the future, there will be opportunities from the United States with the elimination of the temporary import tax from countries outside of the Mercosur bloc.