Paraguay soybean processing stocks will only last until June

Paraguay soybean processing stocks will only last until June due to a prolonged drought period, prompting industries to look for alternatives to meet domestic demand, said business representatives to Reuters.

The fourth-largest soybean exporter in the world faces the worst scenario in a decade: Paraguay soybean processing production has decreased by almost 50% compared to the previous harvest cycle, according to the country’s Ministry of Agriculture.

The Paraguayan Chamber of Oilseeds and Cereals Processors (Cappro) estimates that the production drop caused by the lack of rain could become even more severe, reaching 60% less than the previous period, which produced over 10 million tonnes.

“Given this situation, it is expected that the industries will struggle to process soy in the second half of the year, with the percentage of idle capacity fluctuating between 60% and 70%“, affirmed the commerce chamber in an email sent exclusively to the Reuters.

Cappro requested a tax and customs flexibility regime applicable only for soy imports to the National Economic Team, similar to the temporary admission in Argentina.

“With this… it will be possible to look for regional alternatives to meet the demand that cannot be met locally, ensuring greater industrialization in Paraguay.”

If this measure is approved, it will be the first time Paraguay resorts to importing soybeans.

Cappro’s member industries, including multinationals ADM, Bunge, Cargill, and Louis Dreyfus, processed around 2.8 million tonnes of the oilseed last year, the lowest volume since 2013 and approximately 500,000 tonnes less than in 2020, according to the chamber’s latest statistical bulletin.

In addition to the grains’ lower quality that hinders the crushing rhythm, the drought also caused navigation problems on the Paraguay-Paraná waterway, generating additional costs for the sector.

Cappro’s members are “having one of the worst years in its history, if not the worst, since the industries increased their installed capacity in 2013 from 1.5 million tonnes per year to 4.5 million tonnes per year.” stated the organization.

Fonte: Money Times

To read the full original article, please visit:

https://www.moneytimes.com.br/industrias-paraguaias-so-terao-soja-para-processar-ate-junho-apos-seca/

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