Flour and bran demands try out grain market expansion as imports remain steady

Wheat prices have been moving upwards since October last year, influenced by the strong dollar, imports and, more recently, pressure on domestic demand.

Everything considered, producers should dedicate this year's campaign to plant in a larger area if compared to what it was applied in 2019 for triticulture. In Paraná, SEAB (Secretariat of Agriculture and Supply) indicates that the 2019/2020 season area is expected to grow 5%, going to 1.02 million hectares. At the same time, in April, mills were looking for alternatives to import, in order to mitigate the domestic impact of reduced availability. As some mills reported they had short stocks and the need to resume acquisitions.

In this scenario, wheat buyers pressured the Brazilian government to facilitate the entry of grain into the country, especially from Argentina. In order to alleviate costs, many are calling for a permanent decrease in import duties on the cereal from the Mercosur neighbor. It should be noted that the quota that exempts the payment of TEC (Common External Tariff) of 750 thousand tons of wheat from outside Mercosur expires in May.

Even with the dollar on the rise, Brazilian imports were firm in April, aiming to replenish the stocks of the processing industries. According to data from Secex, until the third week of April, 461.3 thousand tons of wheat had been imported. The daily average of imports was 30.5% above that recorded in April 2019.