Paraguay Set to Grow 10% on Doubling of Soybean ExportsJohn Quigley
Paraguay will more than double soybean exports this year as farms recover from drought, spurring the fastest economic growth in Latin America, Finance Minister Manuel Ferreira said.
Output in South America’s third-largest soybean producer will be as high as 9 million metric tons, compared with about 4 million tons last year, Ferreira said in an interview in Panama City, where he is attending the annual meetings of the Inter-American Development Bank.
Corn and wheat will boost the country’s total grain crop to 14 million tons, spurring a 10 percent rise in gross domestic product, reversing a 1.1 percent contraction last year, Ferreira said. Soybean accounts for 12 percent of the landlocked nation’s GDP. Paraguay aims to boost grain production to 20 million tons by 2020 as farmers use government loans to install irrigation systems and expand growing areas, he said.
“We’re very vulnerable to changing weather so we’re trying to stabilize the agriculture sector through better management of water resources,” he said. “We can irrigate a large part of the production. There is a lot of room to grow in agriculture.”
Paraguayan farmers plan to sow 1.5 million hectares of maize annually by 2015, boosting output to 7.5 million tons from an estimated 3 million metric tons this year.
Increased grain exports have helped spur a 5.2 percent gain in the guarani this year, the best performance among 21 Latin American currencies tracked by Bloomberg.
Yields on the country’s dollar bonds maturing in 2023 have risen 22 basis points, or 0.22 percentage point, to 4.62 percent since being sold on Jan. 17, according to data compiled by Bloomberg.
Paraguay, a member of the Mercosur trade bloc with Argentina, Brazil and Uruguay, will tap demand for high-yield, local-currency debt later this year with the sale of as much as $400 million in guarani-denominated bonds, Ferreira said. The first tranche may be offered next month.
The government is in talks with foreign banks including Citigroup Inc. to create global depositary notes linked to the bonds, he said. The notes resemble the stock market’s American Depositary Receipts and let foreigners buy local securities.
Soybeans rose in Chicago today on signs that shipping bottlenecks in Brazil are encouraging importers to seek U.S. supplies. Soybeans for delivery in May climbed 0.4 percent to $14.4075 a bushel at 6:18 a.m. on the Chicago Board of Trade. The oilseed touched a two-week low yesterday and is set for a 2.1 percent loss this week.