Paraguayan soyabean farmers are leery of falling prices, dry soils and rowdy peasant protests just weeks before they plant the 2004/05 crop, the leader of an export group said late on Monday.
The world's fourth-largest soyabean exporter, Paraguay is expected to produce 3.9 million tonnes of soya in the coming season, up from an unusually small, drought-stricken crop of 3.5 million tonnes last year.
Some 2.05 million hectares are forecast to be sown with soya, in line with last season, according to the Paraguayan Chamber of Grain and Oilseed Exporters (Capeco).
This season, Paraguayan farmers face lower profits because of falling international soya prices and more costly farming inputs. Plus, the government plans to raise taxes on soya production and exportation.
"We foresee a period of austerity and caution in the coming season," Cesar Jure, president of Capeco, told Reuters.
"If they say they will slap on new taxes, this hurts the sector's viability right away. The best thing would be to wait for the harvest, and if it's a good one and producers can do so, then they should pay more," Jure said.
Paraguay exports 70 percent of its soyabeans and processes the rest. In the 2003/04 season, the country exported 2.5 million tonnes of soyabeans.
Another worry, Jure said, is increasing protests by landless peasants demanding that lands be redistributed to the poor. They see the expansion of highly mechanised soyabean cultivation as a threat to subsistence farming.
Protesters have blocked highways and occupied private ranches in recent weeks, but they called a 60-day truce on Sunday to give officials time to respond to their demands.
"We are worried about the political and social climate, which worsens work conditions in the sector ... it would be chaos if this conflict were to spread," Jure said.
A final red flag is a 6-month-long drought in north-west Paraguay, which could delay seedings and hurt yields later on.
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