Brazil set to become world’s largest soyabean producer, overtaking the US
US-China trade war effects production of soybeans for American farmers
Brazil is on track to beat the US as the world’s largest soyabean producer, as a trade war and extreme weather impact American agriculture.
The South American country’s newly planted crop is likely to yield 121.1m tonnes of soyabeans in early 2020, according to agricultural agency Conab.
That is 25 per cent more than the just-harvested US crop of 96.6m tonnes.
The amount of soyabean production has been effected during the US-China trade war, China being the dominant importer of the oilseed. US farmers intended to plant 84.6m acres (34.2m hectares) of soyabeans last spring, down 5 per cent from 2018.
The 25 per cent tariff that Beijing imposed on US-cultivated supplies are still in place as the two countries negotiate new terms on trade and industrial policy.
Brazilian farmers have planted soybeans worth 36.8m hectares, Conab said. The area devoted to soyabeans has expanded by about 1m hectares a year on average over the past decade.
Demand for Brazilian soyabeans has supported their price, with supplies at the port of Paranaguá quoted for $363.50 a tonne, compared with $348 a tonne on the US Gulf Coast.
Soyabean futures in Chicago traded slightly higher at $8.99 a bushel earlier this week after the US government released grain estimates. The price was about a dollar below levels before China’s tariff took effect in mid-2018.
Meanwhile, the Brazilian real has dropped about 7 per cent against the dollar over the year, therefore increasing the value of soyabeans to Brazil’s farmers.
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