Feb 17, 2022

Paraguay to Import Soybeans For First Time

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

Paraguay is the third largest soybean producer in South America after Brazil and Argentina and Paraguay has had extremely poor growing conditions during the 2021/22 growing season. Most of the soybeans are grown in the southeastern part of the country which endured extremely hot and dry conditions during December and January. Extended periods of dryness and very high temperatures impacted the soybeans as the crop was setting pods and filling pods.

Paraguay was expected to produce more than 10 million tons of soybeans in 2021/22, but production estimates have declined to 5 million tons or less.

Farmers in Paraguay are allowed to plant a second crop of soybeans which usually accounts for approximately 20% of Paraguay's soybean production. The weather though continues to be dryer than normal which could hamper germinating and plant development of the safrinha soybeans. Farmers in Paraguay are expected to plant 500-600,000 hectares of safrinha soybeans.

The soybeans in Paraguay are approximately 80% harvested and it is now apparent that the crushing industry will run out of soybeans by the middle of the year due to low supplies and poor-quality soybeans.

As a result, the Paraguayan Chamber of Oilseed and Cereal Processors (Cappro) has petitioned the government for tax exemptions to allow soybeans to be imported from Argentina to keep crushers operating. The Paraguayan soybeans are also of low quality, so better quality soybeans are needed to blend with the poor-quality soybeans to produce acceptable soybean meal and soybean oil for the domestic market.

This will be the first time Paraguay will need to import a significant amount of raw soybeans. Normally, soybeans from Paraguay are barged down the Parana River to crushers and exporters in Argentina.