Brazil's agriculture minister, Carlos Favaro, said this week that there is no need to support the commercialization of Brazil's soybean crop at this time, as oilseeds remain above the minimum set for such businesses.
"At the moment, this is still not necessary, the most remote areas of the port are still above the minimum and there is no need to support the commercialization of soybeans," said Favaro after briefing Finance Minister Fernando Haddad on the difficulties faced by Brazilian producers. ”。
Brazil, and in particular Mato Grosso, the country's main cereal and oilseed producer, is facing reduced crop yields due to a heat-related drought at the end of last year.
According to a decree issued in September 2023, the minimum soybean base established for the 2023 24 harvest is 86 per bagR$54.
At the same time, soybeans in some areas of Mato Grosso are still above the minimum level, but are approaching that value.
According to a survey by the Mato Grosso Institute of Agricultural Economics (IMEA) related to producers, the average in the state reached about R$93 the day before.
But some squares in Mato Grosso, such as Canarana and Piazza Giulio, have been registered for less than R$90 bags.
Favaro recalled that Brazil** has only supported the commercialization of soybeans twice, one of which was in Lula's second edition**.
"I think you need to wait a while to determine if it's necessary, because it's not needed right now, because it's not below the minimum," he reiterated. ”。
Soybeans on the Chicago Exchange, the global benchmark, are volatile and near two-year lows, reflecting strong growth in soybean production in Argentina and a still important harvest in Brazil, even as climate concerns significantly reduce the potential of soybeans.
Favaro cited the examples of Argentina and Rio Grande do Sul, two regions that suffered from drought last season but are expected to recover significantly this year's harvest, while crops in Mato Grosso have been negatively affected by the climate.
The minister indicated that he was presenting the scenario about the sector to his colleague Haddad with the aim of "avoiding a possible crisis in agribusiness ahead of time", since crop production in the largest producing state has fallen against the backdrop of a downturn.
He pointed out that a decision on the matter should be made after the Ministry of Finance has assessed the case, after Lula has determined what measures will be taken.
This avoids issues such as judicialization, judicial recovery and breach of contract.
He also said that based on this information, the Ministry of Finance will be able to calculate the problems related to the debt of the sector and, in a possible package of bailouts, the need for interest rate equalization.
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