Brazil will produce fewer soybeans next year because of the credit crunch brought on by the global economic crisis, the Agriculture Ministry said Thursday.

 

It will be the first time in five years that the output of the world's No. 2 producer of soybeans will drop from one harvest to another.

 

The ministry projects that Brazil's 2008-2009 harvest will be between 58.4 and 59.3 million metric tons, compared to this year's crop of 60 million metric tons.

 

The ministry also forecast that average soybean yields will drop 1.6 percent, coming in at 2.8 tons per hectare (1.1 ton per acre).

 

The report blamed the expected drop in production on "elevated production costs during the planting season and tighter credit conditions caused by the climate of uncertainty resulting from the international crisis."

 

In central-western Brazil, which accounts for half the country's soybean output, the area planted with soybeans is expected to drop 2.9 percent, to 9.35 million hectares (23.1 million acres).

 

Overall, Brazil's 2008-2009 grain harvest, which also includes rice, beans, corn, cotton and wheat, is expected to come in at no more than 141.8 million metric tons, compared to this year's 143.8 million metric tons.