Apr 30, 2020

Paraguay Ethanol Production Impacted by Corvid-19 Pandemic

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The ethanol sector in Paraguay is being impacted very similar to what is happening to the ethanol sector in the United States. The stay-at-home orders as a result of the Corvid-19 pandemic is severely reducing the demand for ethanol in Paraguay.

According to the Sales Director of Inpasa Paraguai in an interview reported in Noticias Agricolas, due to the violent reduction in ethanol demand, one of their facilities have stopped production and ethanol production for the company as a whole is down more than 78%. All of their ethanol is produced from corn and Inpasa Paraguai is responsible for more than 60% of Paraguay's total ethanol production.

The current situation comes on the heels of the devaluation of the Brazilian Real which had already impacted their exports of ethanol and corn to northeastern Brazil. The devaluation of the Brazilian currency made their exports more expensive for Brazilian consumers.

The company is also confronting problems with corn production in Paraguay. Much of Paraguay's corn is planted as a second crop following soybeans and the corn was planted later than normal this year. Since the corn has been planted, the weather has been dryer than normal especially in northern Paraguay where some areas have been nearly two months without rain.

Farmers in central and southern Paraguay increased their corn acreage this year, which will compensate somewhat for the poor weather, but overall corn production in Paraguay is expected to decline by as much as 20% in 2020.