Posted on February, 9, 2024 at 05:23 am
Brazilian grain exporters lobby Anec on Thursday warned it was concerned about a rise in farmer bankruptcy filings in the country, adding a recent increase in cases potentially compromises the execution of grain contracts.
The rise in farmer bankruptcy cases, which may affect delivery of committed grains throughout the season, may also hamper traders' ability to complete their export programs, Anec said.
Farmer groups, including Aprosoja-Mato Grosso and Aprosoja Brasil, did not have an immediate comment.
"Anec views with great concern the growth in the number of requests of judicial recovery," the statement said. "Farmers have been offered - indiscriminately and often maliciously - the judicial recovery procedure as a means of renegotiation of debts and contracts," Anec said referring to loans and also soy and corn contracts.
Anec represents global grain merchants, including ADM, Bunge (NYSE:BG), Cargill, Louis Dreyfus Commodities and China's Cofco, among others.
Brazil is the world's biggest soybean producer and exporter, and a major corn provider to clients in Asia, Europe and the Middle East.
In the current season, however, Brazilian grain production will be below expectations because of the negative effect of the El Nino weather pattern on crops.
El Nino caused a severe drought in the center-west of Brazil, reducing soy yields and production potential in the nation's largest farm state Mato Grosso.
Excessive rains in the South also hurt summer corn prospects in states like Rio Grande do Sul.
Overall, Brazil's total grain production will drop to an estimated 299.7 million metric tons this season, from 319.8 million tons in the preceding one, according to crop agency Conab.
Soy output, initially forecast at 162 million tons in 2023/24, will be 149.4 million tons, Conab said.
El Nino also compromised Brazil's corn.
In a fresh report on Thursday, Conab said Brazil's total corn production will fall by nearly 14% to a projected 113.7 million tons in the current cycle.
Source: Investing