Brazil’s soyabean output is set to fall following floods which have killed at least 150 people in Rio Grande do Sul state and left a quarter of the state's crop still to be collected, Reuters reported.
Three weeks after one of Brazil’s worst-ever floods forced 540,000 people from their homes, experts warned that water levels would take at least another two weeks to drop and five of the state’s seven main rivers were still above maximum water levels, the Guardian wrote on 19 May.
The floods in Brazil’s second largest soyabean producing state after Mato Grosso had also destroyed logistics and power infrastructure and left cities and farms underwater, according to a 10 May report by Splash.
In the town of Canoas, 100,000 tonnes of soyabeans were at risk after a warehouse belonging to privately owned soyabean crusher Bianchini was flooded, Hellenic Shipping News reported on 19 May.
The floods could lead to a drop in Rio Grande do Sul’s soyabean production of up to 15% to total around 19-20M tonnes, Leandro da Silva, a manager at farm cooperative Cotrisal, was quoted as saying in the 3 May Reuters report.
Potential losses in the state could boost soyabean futures in Chicago as they could lead to an overall reduction in output in Brazil, the world’s largest soyabean producer and exporter, Reuters wrote.
“There will be quantitative and qualitative losses,” Silva said by telephone from Sarandi, in the northwest of the state.
“For me, what remains to be harvested will be 30% to 40% damaged (on average). In the most affected areas, you will have 70% to 80% of [soya]beans damaged.”
Although the US Department of Agriculture (USDA) had been predicting Brazil’s soyabean exports to total 103M tonnes this season, 7.8% higher year-on-year, market players could readjust their expectations for the remainder of the season, Splash reported.
Prior to the heavy rains, national crop agency Conab had forecast soyabean output in Rio Grande do Sul at 21.89M tonnes while state crop agency Emater had forecast 22.25M tonnes.
“It's too early to talk about numbers but, yes, we are going to cut a part of Rio Grande do Sul’s production estimate,” Luiz Roque, an analyst at Safras & Mercado said.”
“It will depend on what you can save from the affected crops, but there is the possibility of reducing the Brazilian harvest projection due to the problems in Rio Grande do Sul.”
While Emater had not changed its production forecast in a weekly report published on 2 May, it noted rains were disrupting harvesting of soyabeans in Rio Grande do Sul, where 24% of the soyabean planted area was still to be harvested, the report said.
According to Conab’s April forecast, Brazilian soyabean output in the 2023/24 cycle would be 146.5M tonnes, 5.2% lower than in the previous season as drought had cut production in Mato Grosso.
Reuters wrote that up to 40% of the centre and south soyabean areas of Rio Grande do Sul still had to be harvested, and about 10% in the north, making it difficult to estimate yields and losses.
According to analysts, around 5M tonnes of soyabeans are likely to be “at risk”, but estimates suggest that final losses could be lower at around 1M-2M tonnes.
Broker Adelson Gasparin, based in Passo Fundo, had initially projected potential damage to 2.8M tonnes of soyabeans, while adding that could change as yield loss would vary in the different regions.
