With Paraguay’s 2024 crop coming up this August, it’s worth examining the international market and its abrupt changes this year, as this origin represents 50% of the international supply.
A bearish start to the year when the Indian crop arrived around January brought tension to shippers and farmers during the first quarter. Prices dropped, causing some speculative traders to default on their contracts. The price decline halted when news of drought from Paraguay emerged, raising concerns about potential quality and volume issues.
Looking back, 150,000 hectares were planted in Paraguay in 2024. Thirty percent of the area had an early planting and was affected by drought, resulting in yields of 200 kg/ha. The remaining 70% benefited from a late planting that allowed the rains from recent weeks to “save” the yields, with an expected volume of 400 kg/ha.
This conservative scenario leaves us with a 50,000 MT available volume, with more optimistic estimates at 60,000 MT. Either way, volumes are expected to be at the same level as in 2023. In terms of price, a comfortable zone for the origin seems to be USD/MT 1850 FOB Asunción for the 2024 crop, 99.9% NON-EU (+$150 for EU).
The actual price definition until early 2025 will be determined this August once the harvest is completed. Although significant changes are unlikely, the frost risk hasn’t been totally ruled out at this point.
Due to the nature of the game, this price is not warranted.
