Paraguay is going to double its soybean exports this year as farms recover from the harsh drought, this will spur the fastest economic growth in Latin America, according to Bloomberg.
Output in South America’s third-largest soybean producer will be as high as 9 million metric tons, compared with about 4 million tons last year.
Corn and wheat will boost the country’s total grain crop to 14 million tons, spurring a 10% rise in gross domestic product, reversing a 1.1 percent contraction last year, said Manuel Ferreira, Finance Minister . Soybean accounts for 12% of the landlocked nation’s GDP. Paraguay aims to boost grain production to 20 million tons by 2020 as farmers use government loans to install irrigation systems and expand growing areas, he said.
“We’re very vulnerable to changing weather so we’re trying to stabilize the agriculture sector through better management of water resources,” he said. “We can irrigate a large part of the production. There is a lot of room to grow in agriculture.”
Paraguayan farmers plan to sow 1.5 million hectares of maize annually by 2015, boosting output to 7.5 million tons from an estimated 3 million metric tons this year.
Increased grain exports have helped spur a 5.2% gain in the guarani this year, the best performance among 21 Latin American currencies tracked by Bloomberg.
Yields on the country’s dollar bonds maturing in 2023 have risen 22 basis points, or 0.22 percentage point, to 4.62% since being sold on January 17, according to data compiled by Bloomberg.
Paraguay, a member of the Mercosur trade bloc with Argentina, Brazil and Uruguay, will tap demand for high-yield, local-currency debt later this year with the sale of as much as $400 million in guarani-denominated bonds, Ferreira said. The first tranche may be offered next month.
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