Brazil has the largest cultivated area and production of soybean, being the global leader of soybean exportations. However, the state of Pará, located in the Brazilian Amazon biome, emerged as a new agriculture frontier of this oilseed. Recently, the COVID – 19 pandemic and the war between Russia and Ukraine broken countless global supply chains, including soft commodities. Thus, our research aims to describe the input costs and volatility of the price of soybean in the Paragominas pole, state of Pará, Brazil, between the seasons 2018/19 and 2024/25. The methodology consisted of to analyse the data supplied by a local agricultural company that makes barter between inputs for soybeans with the farmers, being each soy bag equal to 60 kg. We also pricing and to analysing the historical price trend of soybeans in the futures of Chicago board of trade, as well showing some options of derivative tools for hedging to the farmers. The COVID -19 pandemic did not impact the barter in the season 2020/21 (22.19 bags/ha, input costs = US $ 470.43/ha and soy bag price = US $ 21.2). Notwithstanding, in 2021/22 forth, despite the soybean price increased, also were noted a substantial increase in the inputs price and the barter ratio, with the highest peak observed in 2022/23 harvest (28.35 bags/ha, input costs = US $ 884.52/ha and soy bag price = US $ 31.2). We suggest that soybeans producers make their barter with some hedge against falling soybean price by taking up a position in the soybeans futures market, seeking to protect of volatility and fluctuations of market.
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Input costs and volatility price of soybean produced in the state of Pará, Brazil
Published:
02 December 2024
by MDPI
in The 4th International Electronic Conference on Agronomy
session Crops
Abstract:
Keywords: CBOT; Commodities cycle; future market; hedge; tropical agriculture; supply chain