Even with the oscillations at the Chicago Mercantile Exchange (CBOT), the premiums and the exchange rate (these factors determine the soybean price in Brazil), the soybean values in the domestic market are changing less in relation to the previous years. From the middle of March to late June, the CEPEA/ESALQ Index (Paraná state) varied only 2 percent (up and down). At the CBOT, prices oscillated 5.2 percent. In the same period of 2006, the CEPEA/ESALQ Index ranged 4.6 percent and in 2005, 5 percent. At the CBOT, the values varied 2.2 percent in 2006 and 4.9 percent in 2005.
Between May 31st and June 29th, the soybean price at the CBOT for the contract July/07 dropped 5.4 percent. The decrease is related to the perspective of rains in the North-American producer regions.
Regarding the exchange rate, the Real oscillated expressively against the dollar during June, accumulating a devaluation of 0.2 percent against the dollar and closing at 1.93 real per dollar on Friday, Jun 29th. Export premiums, in turn, dropped in the last weeks of June.
The CEPEA/ESALQ Index (Paraná state) averaged 31.33 reals or 16.23 dollars per bag of 60 kilos on Friday, up 3.8 percent in Real and 3.6 percent in dollar over May 31st.
13 years of "Plano Real"
The Brazilian economic plan "Plano Real", which among other things brought the inflation under control in Brazil, was introduced in 1994. Over these 13 years, one of the main effects was on the exchange rate and, as a consequence, on all Brazilian agribusiness exports. For the soybean sector, this period should be divided into three periods.
In the first stage, from July 1994 to January 1999, the monthly exchange rate oscillated between 0.84 and 1.205 real per dollar. It was a very difficult period for the Brazilian farm sector. In the second period (from 1999 to 2004), the exchange rate oscillated from 1.502 real per dollar in January 1999 to 3.806 reals per dollar in October 2002. The second stage was a development period, especially between 2001 and 2004.
The third period begins in Jan/05 and, until June this year, the monthly exchange rate ranged from 2.705 reals in March 2005 to 1.933 real per dollar this month. This stage is marked by higher domestic prices in dollar in relation to the average of the international market, supported by the valuation of the Real.