Paraguay expects a record soybean harvest, but low water levels in rivers slow down exports

Paraguay may harvest a record soybean crop this year, but low river levels are delaying shipments, and drought in central-western Brazil is affecting water levels downstream.

The water level in the Paraguay River, the main route for grain exports from the landlocked country, is significantly lower than last year. Near the main grain port of Villeta, it is 0.74 meters, while last year at this time it was 5 meters. Recently, it was approaching zero, but recent rains have improved the situation a bit.

Paraguay is the world’s third largest exporter of soybeans and this year plans to harvest a record 10.4 mln tons of the oilseed. The largest soybean exporters in the country are Cargill, Viterra and Bunge. The country’s soybean production is recovering from the drought of 2021/22 MY, when the harvest was halved.

In Q1, Paraguay increased the soybean exports from 1.6 mln tonnes to 2.5 mln tonnes compared to the same period last year. However, in March, the shipments slowed down due to the drop in water level due to the dry weather in the Brazilian Pantanal region, despite the dredging of the Paraguay and Parana rivers.

Paraguay delivers grain by barge to seaports in Argentina and Uruguay, and in Q1, 80% of all exports were carried by river. The strike of Brazilian agriculture workers demanding higher wages complicates exports by road. Brazil is the main export market for soybeans, which are transported by truck from Paraguay. However, road deliveries are very slow, so if the dry weather continues, exports may become more difficult in the coming months.

Meteorologists warn that the rains in western Brazil will not last long, so the situation at the mouth of the Paraguay River will remain critical, although it will improve slightly. The drought in the Pantanal region has been going on for over 6 months.

Tags: export, soybean, Paraguay, crop forecast