MercoPress. South Atlantic News Agency

Brazil's grains crop estimate down but at “comfortable level”

Insufficient rainfall in south Brazil, mostly in the states of Rio Grande do Sul, Parana, Matto Grosso do Sul and west Santa Catarina, will cause a 6.53% drop in the 2008/09 grain crop, which will fall from 144.11 million tons to 134.70 million tons, reported this week the Supply Office (Conab) from the Agriculture and Livestock ministry.

"But in spite of the reduction, grain production will be the second highest in history and will remain at a comfortable level not threatening domestic supply or exports", said the director of Conab, Wagner Rossi. The monthly report indicates that soy and corn were the two crops most punished by the adverse climate conditions. Soybean production this season will reach 57.2 million tons, down from the January estimate of 57.7 million tons and the 2007/08 harvest that reached 60.02 million tons. The report points out that the rainfall deficit which begun to be felt at mid November extended until the end of December, early January. In Parana and Matto Grosso, main soybean territory losses are estimated at 11%. This week a second report from the Brazilian Geography and Statistics Institute, IBGE, said that the soybean crop would reach 57.8 million tons, 3.6% down from the previous harvest while yields are expected to decrease 4.6%, "from 2.817 kilos per hectare in 2008 to 2.688 kilos". Regarding corn Conab estimates a crop of 50.3 million tons, below the 52.28 million tons forecast of January and 58.66 million tons of the 2007/08 harvest. "The high cost of inputs, particularly fertilizers and the low price of cereals were the main causes for the retraction in the corn planted area", says the report. The area planted was down 2.37% from 14.78 to 14.43 million hectares. Yields in the most productive corn areas are also down 33% because the drought attacked at the critical flowering moment, adds the report.