Brazil’s Farmers Hoarding Soybeans
Brazil’s farmers, faced with low global prices and a record harvest, have been hoarding soybeans with hopes that global markets will improve. Analysts, however, are wary of the move.
Soybean prices in Brazil have been declining since the middle of last year when farmers began closing advanced sales for the 2016/17 crop – falling more than 30 percent since reaching record highs last June. Now the country is on pace to see a record crop of more than 110 million tons, but exports are slowing as farmers are reluctant to sell amid current conditions, reflected in the fact that lines at Brazilian ports are 30 percent shorter this year compared to last.
As of the end of March, Brazilian soybean sales were only 49 percent of the total crop – the lowest ratio since 2009/10, and 63 percent lower than the five-year average. Meanwhile, in Paraná and Rio Grande do Sul, sales stand at just 27 percent of the total crop.