February 21, 2013 / 5:10 PM / 5 years ago

Rains bolster outlook for record soy crop in Paraguay

* Dry spell had cast doubt on final yields

* Showers seen causing minor impact in northern areas

* Gov‘t, farmers see record crop of more than 8 mln tonnes

By Mariel Cristaldo

ASUNCION, Feb 21 (Reuters) - Paraguay’s soy farmers should gather a record 2012/13 crop of more than 8 million tonnes after recent rains eased concerns that yields could take a last-minute pounding from dryness in the world’s No. 4 exporter.

While the South American country’s harvests are small when compared with those of neighboring soy giants Argentina and Brazil, the agriculture ministry forecasts record output of 8.4 million tonnes, more than twice last season’s drought-hit crop.

Three weeks before the bulk of harvesting will come to an end, average yields are running at 3.0 tonnes per hectare. In some southeastern farming areas, yields of 4.5 tonnes per hectare have been recorded.

Government farming officials say the tinder-dry weather of recent weeks only hurt crops in northern areas, which account for about 10 percent of the country’s soy area.

“These 30 or 40 days without rain did have an impact, but not to a great extent. With these rains, things have recovered,” said Edgar Mayeregger, director of the agriculture ministry’s risk management unit.

“The estimate is for a decline (in production) of 10 percent in the north, in a few places, but nothing more than that,” he told Reuters, maintaining the government’s output forecast.

Paraguay’s largest soy-farming cooperative, Colonias Unidas, which groups 2,600 growers, said production could climb to as much as 8.5 million tonnes.

“Last year, we had an average yield of 1.1 tonnes per hectare, which wasn’t even enough to cover direct production costs. This year, we’re going to make up for that and it will improve farmers’ financial situation in general,” said the cooperative’s general manager, Ricardo Wollmeister.

The government will update its production estimate in mid-March when growers in the main soy belt have gathered most of their crops.

Freshly harvested beans are already being shipped to markets in Asia and the European Union. By mid-February, Paraguay had exported just over 600,000 tonnes of soy, according to the latest customs data.

Farmers expect the rate of shipments to slow as soy-crushing plants come on line and absorb larger volumes of beans. Archer Daniels Midland, Bunge and Louis Dreyfus are preparing to open two large processing factories.

“The crushers are going to start operating and that means there will be exports throughout the year, the export season will be a lot longer. Still, at the moment, exports are normal and there haven’t been any problems,” Wollmeister said.

Paraguay currently crushes about 30 percent of its soy harvest, but industry analysts expect that to reach 60 percent due to the new plants.

Hamburg-based oilseeds analysts Oil World said last month it expected soybean crushings to more than double between February 2013 and January 2014, probably reaching a record 3.2 million tonnes.

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