MercoPress. South Atlantic News Agency

Drought hits Paraguayan soybean production

Argentine soybean oil processing plants will need to find their input elsewhere

Paraguay's meager output of soybeans this year will prevent it from capitalizing on soaring international prices, it was reported in Asunción.

Due to the drought, Paraguay's production is expected barely reach 2.97 million tons, 68% less than in 2020/21, the Paraguayan Chamber of Exporters and Traders of Cereals and Oilseeds (Capeco) explained.

It would be the lowest result since the 1996/97 cycle when the sowing area barely occupied 1.05 million hectares versus 3.30 M/ha sown in the last campaign.

The current season is desperate for most agricultural companies because the average yield at the national level is only 900 kg/ha, the lowest figure in Paraguay's history, which also turns into an increasing idle capacity at soybean oil processing plants.

Soybeans processed in the last season (2020/21) by the Paraguayan oil industry (2.80 million tons) is tantamount to the harvest to be achieved in the current cycle, it was reported.

In such a scenario, the export of soybeans, most of which is sent to Argentina under the temporary admission regime, will be considerably reduced this year, which will represent a challenge for the Argentine oil industry that usually uses Paraguayan shipments to ensure an adequate protein content in soybean pellets and flours.

Between March and December 2021, the Argentine oil industry had imported 4.78 million tons of soybeans, mostly from Paraguay.

In 2022, with no availability abroad, since the harvest in southern Brazil was also affected by the drought, the Argentine oil industry will face additional hardships, it was estimated.