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FAO Regional Office for Latin America and the Caribbean

FAO forecasts drops in rice, coarse grain, soybean and sugar production in Latin America

Aggregate soybean output estimated to register a 9-percent setback in South America, says FAO’s Food Outlook.

Brazil is set to replace the United States as the world’s third largest supplier of soyoil and will remain the world’s top supplier of meal and poultry meat.

11th of July 2018 - FAO forecasts drops in soybean, rice, coarse grain, soybean and sugar production in Latin America, and increases in milk output and bovine meat.

According to FAO’s Food Outlook, Brazil is set to replace the United States as the world’s third largest supplier of soyoil and will remain the world’s top supplier of meal and poultry meat.

Wheat

In South America, an expansion in plantings in Argentina has boosted its production forecast to 20 million tonnes, up 8 percent year-on-year, while Mexico, the main producer of Central America, record low wheat plantings have acutely weighed on production prospects.

Imports of wheat In Latin America and the Caribbean in 2018/19 are forecast to approach 25 million tonnes, up by around 1 million tonnes, mostly due to larger imports by Brazil and Mexico the regions biggest wheat importers.

Coarse grains

In South America, significant coarse grains production declines are forecast in Argentina and Brazil, with maize harvests expected to fall by about 15 percent from the record highs of 2017.

In Latin America and the Caribbean, total maize imports are forecast at nearly 36 million tonnes, 1.3 million tonnes more than in 2017/18, with the biggest increase foreseen in Mexico, Colombia and Chile. Maize imports by the region’s largest importer, Mexico, are set to reach a record 16.7 million tonnes, up 900 000 tonnes from 2017/18, driven by growing feed demand and this year’s decline in domestic production.

Tighter export availabilities are expected to result in a smaller exports of maize by Brazil, which are forecast to fall by 1.5 million tonnes to 30 million tonnes in 2018/19. Total exports of coarse grains by Argentina should remain steady at just under 29 million tonnes.

Rice

Production for Latin America and the Caribbean, prospects are negative, pointing to a likely 1.5-percent annual retrenchment in aggregate production to 18.6 million tonnes. Argentina, Brazil, Ecuador, Colombia, Uruguay and Venezuela are all poised to harvest less rice than in 2017, outweighing anticipated increases in Bolivia, Chile, Cuba, the Dominican Republic, Guyana, Paraguay and Peru.

Total purchases by Latin America and the Caribbean could decline by 5 percent to 4.2 million tonnes, as a result of cuts in Brazil, Haiti, Mexico and Peru, due to sufficient local availabilities and higher international prices. Brasil will see a strong (55 percent) annual recovery in 2018 rice exports, forecast at 0.9 million tonnes.

Oilcrops, oils and meals

Aggregate soybean output is estimated to register a 9-percent setback in South America, as severe weather-related losses in Argentina, Paraguay and Uruguay outweigh further production gains in Brazil.

In Argentina, the third largest soybean producer, the country’s average yield and soybean output tumbled, respectively, to 6 and 9-year lows. In Brazil, on the other hand, increases in area sown and near ideal growing conditions elevated output to unprecedented levels.

Regarding soyoil, much of the anticipated sharp drop in shipments from Argentina and Uruguay would be made up for by Brazil, this season’s most competitive supplier. Indeed, in 2017/18, Brazil could replace the United States as the world’s third largest supplier.

In global meal transactions, Argentina could possibly record a 9-year low in exports.  Uruguay’s sales may contract on poor crop outturns. The main beneficiary would be Brazil, whose exports are forecast to expand by another 17 percent, consolidating the country’s position as the world’s top supplier – ahead of the United States.

Sugar

In South America, the latest estimates show that production is expected to decline in 2017/18, amid generally unfavourable weather conditions (Argentina), and a higher share of sugarcane harvest being used for ethanol production (Brazil).

Sugar output in Brazil is forecast to fall: production is now estimated at 36 million tonnes, down 4 million tonnes from the volume reached in 2016/17. About 58 percent of the sugarcane harvest is expected to be utilized for the production of ethanol.

 

Elsewhere in South America, sugar production is expected to increase in Colombia, the second largest producer in the region, and in Peru, and to fall in Argentina amid extreme dry conditions. In Guatemala, sugar output in 2017/18 is foreseen to expand by 2 percent.

 

Brazil is set to supply 42 percent of world exports in 2017/18. Similarly, exports by Guatemala, the second largest exporter in Latin America and the Caribbean, are foreseen to expand; Sugar has become a key source of foreign exchange earnings for the country, which has increasingly focused on gaining market shares in the refined sugar segment.

 

Meat and meat products

 

World bovine meat output is forecast to rise by 1.8 percent to 72.1 million tonnes in 2018, marking a third year of solid growth. Particularly large increases are expected in Brazil and Argentina

 

Among exporters, Brazil is expected to sell 7 percent more beef to international markets than in 2017, thereby consolidating its position as the world leading beef exporter. Brazil may incur a 34 percent contraction in pigmeat in 2018. Brazil is forecast to remain the leading poultry meat exporter in the world.

 

Milk

 

In South America, the region’s milk output is anticipated to rise by 2.1 percent to 64.8 million tonnes, mainly led by gains in Argentina, Brazil and Colombia. In Central America and the Caribbean, milk output is forecast to rise by 0.9 percent to 17.7 million tonnes.  After a sharp drop in 2017, a recovery of production in Argentina should help to drive an upturn in the country’s dairy exports.

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