Brazilian wheat imports nosedive YOY, however sourcing spectrum is further potentialized
Caio Alves
Published 2020년 8월 17일
The commercialization of wheat in the physical market has not developed that much, and the prices continue to be firm. This week, spot trading remained calm. In the region of Campos Gerais, Paraná, the average price reached R$ 1,150 per ton for September delivery. At Rio Grande do Sul, the cereal prices fluctuated between R$ 980 and R$ 1,000 per ton with December delivery at Rio Grande do Sul's port.
Brazil imported 509.1 thousand tons of wheat in July, accounting for US$ 114.18 million (FOB prices), according to data from Agrostat - Brazilian agribusiness foreign trade statistics system, analyzed on Friday 14th.
Most of the volume acquired last month by the domestic wheat milling industry (409.95 mt), was originated in Argentina. In comparison with the amount acquired by the country in the same period last year (558.31 mt), it closed at a -9% retraction. The wheat value YOY reported a decline of -11% in reference to the US$ 127.81 million spent in July 2019.
The average price of imported wheat also retracted 2%, going from US$ 228.93/mt in July 2019 to US $ 224.27/mt in the last month, although this year the strenghtening of the dollar currency against the brazilian real weighed further more. In the first seven months of the year, Brazilian mills purchased 3.992 million tons of cereal from abroad, 2.6% more than in the same period last year. What needs to be highlighted in the comparison between both years is that the accumulated shipments coming from the United States more than doubled during the period, and an insistent drought in Argentina may prevent crops to yield accordingly. Another strong fundamental that may push wheat importers towards other origins is the new wheat import quota extension from markets outside the Mercosur trading bloc.
The US government estimates that Brazil should import 6.6 million tons in the 2020/21 harvest - considering all the acquired origins. In July, Brazilian mills also purchased 70,000 tonnes of Russian wheat. According one Russian agricultural research consultancy, there were two shipments of 35,000 tonnes. The consultancy estimated that Brazil shall import 120 thousand tons of Russian wheat in the 2020/21 season, compared to 90 thousand tons reported in the 2019/20 cycle. Russia started selling the cereal to South American countries in the last season, after reviewing phytosanitary procedures. The Russian cereal also benefits from the Common Foreign Tariff exemption quota on wheat purchased from countries outside Mercosur. Both the Russian and the North American cereal are used by the milling industry to mix bread flour for the protein content above Argentine and domestic wheat. Purchases from these sources occur seasonally in this period, due to the Argentine off-season.
Russian wheat exports dropped to $200/mt for the first time since early July, indicating an interesting momentum for Brazilian millers, also russian domestic wheat prices are down everywhere on high harvest pressure.
Brazil imported 509.1 thousand tons of wheat in July, accounting for US$ 114.18 million (FOB prices), according to data from Agrostat - Brazilian agribusiness foreign trade statistics system, analyzed on Friday 14th.
Most of the volume acquired last month by the domestic wheat milling industry (409.95 mt), was originated in Argentina. In comparison with the amount acquired by the country in the same period last year (558.31 mt), it closed at a -9% retraction. The wheat value YOY reported a decline of -11% in reference to the US$ 127.81 million spent in July 2019.
The average price of imported wheat also retracted 2%, going from US$ 228.93/mt in July 2019 to US $ 224.27/mt in the last month, although this year the strenghtening of the dollar currency against the brazilian real weighed further more. In the first seven months of the year, Brazilian mills purchased 3.992 million tons of cereal from abroad, 2.6% more than in the same period last year. What needs to be highlighted in the comparison between both years is that the accumulated shipments coming from the United States more than doubled during the period, and an insistent drought in Argentina may prevent crops to yield accordingly. Another strong fundamental that may push wheat importers towards other origins is the new wheat import quota extension from markets outside the Mercosur trading bloc.
The US government estimates that Brazil should import 6.6 million tons in the 2020/21 harvest - considering all the acquired origins. In July, Brazilian mills also purchased 70,000 tonnes of Russian wheat. According one Russian agricultural research consultancy, there were two shipments of 35,000 tonnes. The consultancy estimated that Brazil shall import 120 thousand tons of Russian wheat in the 2020/21 season, compared to 90 thousand tons reported in the 2019/20 cycle. Russia started selling the cereal to South American countries in the last season, after reviewing phytosanitary procedures. The Russian cereal also benefits from the Common Foreign Tariff exemption quota on wheat purchased from countries outside Mercosur. Both the Russian and the North American cereal are used by the milling industry to mix bread flour for the protein content above Argentine and domestic wheat. Purchases from these sources occur seasonally in this period, due to the Argentine off-season.
Russian wheat exports dropped to $200/mt for the first time since early July, indicating an interesting momentum for Brazilian millers, also russian domestic wheat prices are down everywhere on high harvest pressure.
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