Brazil is on track to harvest record amounts of soy, corn and other grains this year, fueled by newly booming demand for commodities, particularly from China.
Farmers in the world’s No. 1 soy producer and No. 3 corn producer have been harvesting at a record pace, capitalizing on prices that have leaped to multi-year highs on world markets after plunging because of the COVID-19 pandemic last year.
The South American giant got off to a slow start because of a drought last season in key grain-belt states, but now has a bumper crop coming in thanks to superb weather.
“Grain production in Brazil continues at the record pace we have seen through the 2020-21 harvest season, with growth of 16.8 million tonnes, or 6.5 percent, over the last harvest,” the government’s agricultural supply agency Companhia Nacional de Abastecimento said on Thursday.
Brazilian grain farmers expanded their total crop land this year by 68.5 million hectares , a 3.9 percent increase, it said.
The soy harvest is forecast to come in at an all-time high of 135.5 million tonnes, 8.6 percent more than last year’s crop, which was itself a record.
Corn is also on track for a record, with a forecast harvest of 109 million tonnes, up 6.2 percent.
The huge crop has farmers working full-steam in places such as Salto do Jacui, which sits at the heart of farm country in the southern state of Rio Grande do Sul, Brazil’s third-biggest grain producing state.
Working side-by-side, combines have been plying the golden fields, cropping the sea of soybeans under a bright blue sky.
“We’re very happy with the results of this year’s harvest,” farmer Adroaldo Rossato said.
“Thanks to great weather we had excellent productivity, and prices are also very high, way above previous years,” he said on a break from harvesting.
Much of Brazil’s crop is set to head to China, whose rebound from the pandemic has put it back in the market for commodities in a big way.
The Bloomberg Commodity Index is up 32 percent over the past year, as Beijing’s renewed appetite for raw materials is driving prices to multi-year highs.
China has again become a voracious importer of not just soy — which it largely uses for hog feed — but oil, copper, iron ore and coal.
The trend has some analysts wondering whether the world is at the start of a new “commodities supercycle,” but it is likely too early to call.
“If we are to see the start of a new supercycle, this robust demand growth that we are seeing from China will have to be sustainable for several years,” ING bank head of commodities strategy Warren Patterson said in a note.
‧ Gold for June delivery fell US$13.40 to US$1,744.80 an ounce, up 0.95 percent for the week.
‧ Silver for May delivery fell US$0.26 to US$25.33 an ounce, rising 1.52 percent from a week earlier, while May copper fell US$0.05 to US$4.04 a pound, a weekly increase of 1.25 percent.
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