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(Adds farmer's quote in 10th paragraph)
SAO PAULO, Aug 7 (Reuters) - The price of Brazilian soybeans in local currency reached the highest level in almost two months, driven by a spike in port premiums for soybeans and a weaker currency, both caused by the trade dispute between China and the United States.
Prices in Sorriso, at the heart of Brazil's soy country in the state of Mato Grosso, closed at 62.31 reais ($15.67) per bag on Tuesday, 0.81% above the previous day and the highest level since June 18, according to price research center Cepea/Esalq. <SB-GSORR-BR>
Brazil's port premiums at Paranaguá rose to $1.35 over Chicago futures on Tuesday after the United States escalated the war against China, the world's largest soy importer, which responded by halting all deals for U.S. farm products. <SB-PREMP-C1>
Brazil port premiums have soared 70% from June 16, Refinitiv data shows, reaching the highest level since November 2018.
Camilo Motter, a grain broker in Paraná state, said that the combination of a weak Brazilian real and high port premiums were boosting values for soybeans in the domestic market, when considering reais per 60-kg bags.
The Brazilian currency fell almost 5% against the dollar this month to almost four to the greenback on Wednesday.
Lucílio Alves, a grains analyst with Cepea/Esalq, said Chinese demand is likely to rise. "After the escalation of the trade war, they will probably focus on Brazil and even cancel U.S. soybean purchases," he said.
Brazilian farmers are taking the opportunity to sell old crop soy and also to clinch some deals to sell next year's crop that they will start to plant next month, according to producers association Aprosoja.
"The producer waits for moments like this," said Bartolomeu Braz Pereira, head of Aprosoja, adding that some farmers have also boosted barter deals with suppliers of fertilizers and agrochemicals, already looking to guarantee inputs for the next crop, and taking advantage of better relative prices for the beans.
"Yesterday and today, grain traders called bidding for future soy, but forward sales remain slow," said Antônio Galvan, a Mato Grosso farmer, adding he has no old crop left to sell.
Brazil is expected to increase soybean planted area by 2.3% in the new season, tilling a total of 36.7 million hectares, according to a Reuters poll. ($1 = 3.9774 reais) (Reporting by Ana Mano and Roberto Samora, writing by Marcelo Teixeira; Editing by Steve Orlofsky and Sandra Maler)