Traders Sue Brazil Soybean Farmers for Reneging on Early Sales
- Some growers refuse to deliver beans sold in forward contracts
- Grain merchants may have ‘big financial losses,’ group says
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Some Brazilian soybean farmers are defaulting on forward sales made months ago when prices were lower, sparking lawsuits and potentially causing financial losses for trading houses.
Farmers in the world’s largest producer and exporter of the oilseed have sold the most supply ever in advance this season, boosted by strong demand and a weak Brazilian real. By last July, 40% of the 2020-21 crop was already disposed of, compared with the five-year average of 12%. Since the first negotiations, prices more than doubled on robust China demand, causing some farmers to regret selling so much volume.