Rio Grande do Sul soy producers face losses due to excessive moisture

Soybean traders in Brazil are facing double trouble. While heavy rains have disrupted movement of soybean from farmer warehouse to port, the increased moisture content is also forcing traders to close the deal at lower prices.

Heavy rains in Rio Grande do Sul, has forced one of its 336 municipalities - Camaquã, to declare a state of public calamity.

Producer and consultant Emerson Peres says that the soybeans are soaked and the machines can't harvest them because they're clogging. He took samples from his 70-hectare area to offer to the industry, but two companies have already refused the purchase because the grain had almost 30% moisture, in addition to 34% burning.

Meanwhile, the oilseed harvesting reached 76% of the area in the whole of Rio Grande do Sul, according to the Emater-RS. This means, about 1.6 million hectares dedicated to the crop still need to be taken out of the ground.

However, it is not yet known how much of this area suffered from flooding. Due to the production potential, it would mean that about five million tons could be lost. However, for Rabobank's Grains and Oilseeds analyst, Marcela Marini, it is safe to say that up to two million tons of the grain are at serious risk.

"When we looked at the weather that negatively impacted production in Mato Grosso, which lost about 10 million tons, we estimated that Rio Grande do Sul would compensate for this drop, but that will no longer happen," he says.

The latest survey by the National Supply Company (Conab), in April, indicated that the state would produce 21.8 million tons of soybeans. However, the estimate now is that it will hardly exceed 20 million tons.

Another producer who has reported serious problems in the crop is Jorge Iglesias, from Rio Grande. Although the municipality is not on the list of those who declared a state of public calamity, he says that the rains punished the countryside.

"Those who grow rice have managed to save their production here, but soybeans, from what I've observed, won't have anything left. This is an unprecedented situation. We don't know what to do, where to run," he says.