Paraguay is a successful producer and exporter of soybeans and has built a small wheat export trade, but its producers are under pressure from low world prices. Wheat flour is a growing part of the diet of the people of the country. Ethanol production is increasingly derived from sugarcane.

According to the International Grains Council (IGC), Paraguay’s maize (corn) crop in 2016-17 will come to an unchanged 3.3 million tonnes. It will export 3.4 million tonnes, down from 3.7 million in 2015-16.

Paraguay’s crop of soybeans in 2016-17 will be 8.9 million tonnes, up from 8.8 million the year before. It will export an unchanged 4.7 million tonnes of soybeans and an also unchanged 2.7 million of meal.

The USDA attaché forecasts a 2016-17 wheat crop of 1 million tonnes, down from 1.2 million the year before, with exports at 500,000 tonnes in 2016-17, down from 600,000 the prior year.

The attaché explained the fall in output: “This is a reduction from last year’s volume primarily due to a significant drop in planted area as a result of expected low prices and profitability. Current projected net margins are slightly negative. Most contacts forecast a drop in planted area between 10% to 40%.”

Many farmers will instead increase the use of winter cover crops, such as oats, and plant summer soybeans immediately after, the report said.

“Paraguayan wheat is expected to suffer strong pressure from a large export surplus from Argentina’s 2016-17 wheat crop. The main market for wheat for Argentina and Paraguay is Brazil. Wheat production in Paraguay takes place primarily in the southeast, in the Departments of Misiones, Alto Parana and Itapua. Planting is normally done in May, while harvest is in September to early October.”

Paraguay, until the early 2000s, was a net wheat importer, but the research and development of local varieties made it possible to expand its wheat area to 500,000 to 600,000 hectares a year and become a wheat exporter, it said.

“Producers utilize good technology, good seed genetics and fertilization. Average yields usually range between 2 to 2.4 tonnes per hectare. In general, the protein content of Paraguay’s wheat is over 12%.”

The attaché’s forecast for the 2016-17 maize crop is 3.5 million tonnes, down from a figure of 3.75 million the year before.

“As with wheat, an expected important increase in production in neighboring Argentina is expected to put a downward pressure on local farmers’ expectations,” the report said. “However, lower costs of production (especially fertilizers and seed prices), and some changes in agronomic practices are expected to keep the harvested area at 720,000 hectares.”

Two Crops per year

The attaché explained how the season runs in Paraguay.

“After the harvest of the first soybean crop (called summer soybean) in January, some farmers plant in the same field either late soybeans (called soja zafrinia) or late corn (called maiz safrinia),” the report said. “There is currently a lot of discussion of whether soybeans after soybeans is a good agricultural practice as it does not cut the cycle of diseases, weeds and insects. There are many technicians who advise against this practice, but many farmers continue to plant due to its economics.”

Paraguay has two different maize seasons.
Source: U.S. Department of Agriculture

“The early corn is usually planted in September and harvested in February-March,” the attaché explained. “The area planted with this corn normally ranges between 20,000 to 40,000 hectares, and yields on average 8 tonnes per hectare. The late corn is normally planted after the soybeans harvest in late January-February and harvested in July-August. Its area normally ranges between 650,000 to 750,000 hectares. Late corn typically yields between 4.5-5.5 tonnes per hectare.”

Corn is planted throughout Paraguay, and there are many small-family farms which use it for their own use, the report said.

“Production is concentrated in the hands of the more progressive producers, who utilize good technology, in the Departments of Alto Parana, Itapua and Canindeyu, in the eastern part of the country. This area represents over 80% of production. Most farmers use no-till drill, good volumes of fertilizers and biotech seeds. The risk for the late planted corn is the lack of rainfall in a period of more than two weeks during autumn.”

Paraguay also produces rice. The attaché projected the 2016-17 crop at 700,000 tonnes, on a rough production basis. “Despite a lower harvested area, this is an increase from the previous year which was badly affected by excess rainfall due to El Niño,” the report said. “The local rice sector is going through difficult times due to excess stocks and low export prices.

“The Departments of Misiones, Itapua and Caazapa concentrate about 80% of the country’s rice production. Eight rice mills in the Itapua area account for more than 80% of the demand.”

Flour consumption rising

Wheat flour consumption is on a trend upwards as Paraguayans shift from eating manioc to wheat flour and products based on wheat flour.

“Wheat flour consumption in Paraguay has been growing strongly in the past few years, primarily due to the growth of the country’s economy and to the fact that the distribution system for flour has improved significantly, especially now reaching cities and towns in the interior of the country,” the attaché said.

“The city of Juan Eulogio Estigarribia (also known as Campo 9), located between the main country’s cities of Asuncion and Ciudad del Este, hosts the largest concentration of flour mills, followed by Asuncion. There are approximately 36 wheat flour mills in the country. They have production capacity of 1.15 million tonnes of wheat and are currently running at 55% capacity.”

Record Ethanol Production

Paraguay does have a large ethanol industry, which consumes corn, but it is not expected to expand this year, while the expanding feed lot business primarily uses silage.

“Paraguayan ethanol production is forecast to reach a record 215 million liters in 2016,” said an attaché report on the subject. “This is a result of expected larger sales of gasoline as the local economy continues to expand.

“Contacts estimate that 65% of the ethanol produced in Paraguay in 2016 will be produced from sugarcane, while the rest will be from grains (mostly corn),” it said, noting that corn had been the majority feedstock for ethanol until recent government measures designed to support small sugarcane producers were enacted.

Soybean use limited
Source: U.S. Department of Agriculture

Although Paraguay is a fairly large producer of soybeans, domestic consumption of them and their products is minimal, according to the attaché. “Soybeans and soybean meal are used in feed rations for the pork and poultry industries,” a report on the sector said. “Use for cattle rations is very limited as most cattle are still fed on pasture.”

The use of soybean oil for biodiesel is limited because it is more expensive than animal fat.

“Despite financial difficulties, soybean profitably continues to be fairly good,” the report said.

“Paraguayan producers are quick adopters of new production technologies, specifically biotechnology,” it said. “An estimated 95%-97% of Paraguay soybeans come from biotech varieties.

“Contacts state that producers could achieve cost savings through more efficient applications of fertilizer. However, it is doubtful that producers modify such methods. Financing for inputs is still largely provided by input companies. Producers enter what local contacts describe a “barter-like” arrangement where providers will supply inputs to producers in exchange for a negotiated volume of soybeans. In addition, financing is also available through private banks where all transactions are made in dollars.”

Key Facts


Population:6,783,272 (July 2015 est.)

Religions: Roman Catholic 89.6%, Protestant 6.2%, other Christian 1.1%, other or unspecified 1.9%, none 1.1% (2002 census).

Location:Central South America, northeast of Argentina, southwest of Brazil.

Government:Presidential republic. Chief of state and head of government: President Horacio Cartes Jara (since Aug. 15, 2013).

Landlocked Paraguay has a market economy distinguished by a large informal sector, featuring re-export of imported consumer goods to neighboring countries, as well as the activities of thousands of microenterprises and urban street vendors. A large percentage of the population, especially in rural areas, derives its living from agricultural activity, often on a subsistence basis. Because of the importance of the informal sector, accurate economic measures are difficult to obtain. On a per capita basis, real income has stagnated at 1980 levels. The economy grew rapidly between 2003 and 2008 as growing world demand for commodities combined with high prices and favorable weather to support Paraguay’s commodity-based export expansion. Paraguay is the sixth largest soy producer in the world. Drought hit in 2008, reducing agricultural exports and slowing the economy even before the onset of the global recession. The economy fell 3.8% in 2009, as lower world demand and commodity prices caused exports to contract. The government reacted by introducing fiscal and monetary stimulus packages. Growth resumed in 2010, and has been erratic, although positive, ever since. Severe drought and outbreaks of foot-and-mouth disease led to a drop in beef and other agricultural exports. In addition to the agricultural challenges, political uncertainty, corruption, limited progress on structural reform, and deficient infrastructure are the main obstacles to long-term growth

GDP per capita:$8,800 (2015 est.); inflation: 3.4% (2015 est.); unemployment: 5.5% (2015 est.).

Currency:Guarani (PYG): 5,613.45.guaranis equal 1 U.S. dollar (May 19, 2016).

Exports: $8.352 billion (2015 est.): soybeans, livestock feed, cotton, meat, edible oils, wood, leather.

Imports:$9.604 billion (2015 est.): road vehicles, consumer goods, tobacco, petroleum products, electrical machinery, tractors, chemicals, vehicle parts.

Major crops/agricultural products:
Cotton, sugarcane, soybeans, corn, wheat, tobacco, cassava (manioc, tapioca), fruits, vegetables; beef, pork, eggs, milk; timber.

Agriculture:18.9% of GDP and 26.5% of the labor force.

Internet:; 1.9 million users.

Source: CIA World Factbook