By Daniela Desantis and Lucinda Elliott
ASUNCION (Reuters) - Paraguay's exports of its soybean crop, delayed by low river levels and weak prices earlier in the year, are gaining momentum, shipment data shared with Reuters show, as farmers speed up sales on stronger global demand and rosier values.
The landlocked South American nation's shipments of the oilseed hit 1.13 million metric tons in May, up around 34% versus the previous month, the previously unreported data show, making it by far the strongest month of the year so far.
Paraguay, which overtook drought-hit neighbor Argentina as the No. 3 exporter of soy beans last year, is expected to harvest a record soy crop of over 10 million tons for the 2023/24 season. However, shipments had been stalled by low river levels, key for the barges that take the grain down river.
"Now the situation is improving for the Paraguayan farmer who still has grains," Manuel Ferreira, a local consultant and former finance minister said. July soy futures in Rosario have also hit around $325 after dipping below $280 in February.
The country hosts key global grains traders, with major exporters including Cargill, Viterra, and Bunge (NYSE:BG).
The data shared with Reuters by Paraguay's national tax revenue directorate shows that until the end of May, the country had exported almost 4.6 million tons of soybeans. Sales started the year well but stalled in February and March.
Hector Cristaldo, president of the Paraguayan grains production union, said soy farmers had been "waiting for a rebound" in prices after holding on to their crop amid the disruption to barges brought on by shallower rivers.
Ferreira added that demand was also picking up from neighboring Argentina, one of the biggest global exporters of crushed soyoil and meal that are processed from soybeans in massive plants along the Parana River before being exported.
"(They need) greater volume for the strong crushing cycle between July and August," Ferreira said, adding global prices could get a further boost as the U.S. crop is used up in the months ahead.
Paraguay's rivers, however, remain low with a severe drought in the Pantanal wetlands in western Brazil impacting water levels, meaning barges cannot take complete loads.
"Barges are not being loaded to their full capacity and that generates delays in shipments," said Sonia Tomassone, foreign trade adviser at the Paraguayan Chamber of Oilseed and Cereal Exporters (CAPECO).
The level of the Paraguay River near the key grains port of Villeta stood at 0.85 meters on Monday, official data show, well down from 3.5 meters a year ago, though better than in March when it was near zero. More dry weather is expected.
Waterways that move barges to seaports down river in Argentina and Uruguay are essential for Paraguay. Almost all of the remaining 4 million tons of soy destined for export this season must travel along rivers.