Requests for judicial recovery from Brazilian farmers worry exporters – 02/08/2024 – Market

Requests for judicial recovery from Brazilian farmers worry exporters – 02/08/2024 – Market

Anec (National Association of Cereal Exporters) warned this Thursday (8) that it is concerned about the increase in requests for judicial recovery from farmers in the country, adding that the recent increase in cases could compromise the execution of grain contracts.

The increase in cases of judicial recovery of producers in Brazil, which could affect the delivery of compromised grains throughout the season, could also harm the ability of traders to complete their export programs, Anec said.

Farmer groups, including Aprosoja-MT (Mato Grosso) and Aprosoja Brasil, did not immediately comment.

“Anec sees with great concern the growth in the number of requests for judicial recovery, especially based on the information that has come to its attention, that producers have been offered — in an indiscriminate and often malicious manner — the procedure […] as a means of renegotiating debts and contracts”, said the association, in reference to agreements involving soybeans and corn.

Anec represents global grain traders, including ADM, Bunge, Cargill, Louis Dreyfus Commodities and China’s Cofco, among others.

In a report, Anec said it recognized that the “judicial recovery institute has its purpose and can be a valuable instrument to guarantee the continuity of producers’ activities in certain situations”.

But he warned that “the growing demand for this procedure, often chosen without due criteria by the producer, brought to him by misinformation or bad faith, has a cost for the entire economic chain and for the country’s image abroad.”

Anec also said that the direct consequence for producers is the “sharp drop in the supply of credit associated with the increase in its cost when granted”.

Brazil is the largest producer and exporter of soybeans in the world and an important supplier of corn to customers in Asia, Europe and the Middle East.

In the current season, however, Brazilian grain production will be below expectations due to the negative effect of the El Niño weather pattern on plantations.

El Niño caused a severe drought in the Center-West of Brazil, reducing soybean yields and production potential in the country’s largest agricultural state, Mato Grosso.

Excessive rain in the South also harmed the prospects for summer corn in states such as Rio Grande do Sul, in addition to wheat crops.

Overall, Brazil’s total grain production will fall to about 299.7 million metric tons this season from 319.8 million tons last season, according to Conab.

Soybean production, initially forecast at 162 million tons in 2023/24, will be 149.4 million tons, Conab reported.

In a new report released this Thursday (8), Conab said that Brazil’s total corn production will fall by almost 14%, to a projected 113.7 million tons in the current cycle.

Source link