Traders sue Brazilian farmers for defaulting on early sales

Traders sue Brazilian farmers for defaulting on early sales


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Farmers may be able to make more money by paying fine in contract and selling the same soybeans on the spot market.
Bloomberg | Feb 24, 2021
By Tatiana Freitas
Some Brazilian soybean farmers are defaulting on forward sales made months ago when prices were lower, sparking lawsuits and potentially causing financial losses for trading houses.
Farmers in the world’s largest producer and exporter of the oilseed have sold the most supply ever in advance this season, boosted by strong demand and a weak Brazilian real. By last July, 40% of the 2020-21 crop was already disposed of, compared with the five-year average of 12%. Since the first negotiations, prices more than doubled on robust China demand, causing some farmers to regret selling so much volume.

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