South American giant extends its wheat import quota outside the trade bloc. Argentine sale futures may be at stake
Caio Alves
Published 2020년 6월 24일
The decision of the Brazilian government to increase the quota for the import of wheat from outside Mercosur generated a protest from producers and exporters in Argentina, the main supplier of the cereal to the country.
Exporters represented by the Vegetable Oil Industry Chamber and the Cereal Exporters Center (Ciara-CEC) sent protest notes to the Argentine government.
Although the export program with Brazil in this campaign is already well advanced, the decision affects the sale futures for the main Argentine buyer. Market losses for wheat originated in Argentina and questions about the economic integration of Mercosur and its main agreements are at stake.
Historically, Argentina supplied 90% of the volume of wheat imported by Brazil - which varies between 5 million and 6 million tons every year. But in 2019, the percentage was 85% with the expansion of Argentine exports to other markets, mainly in Asia.Last week, the Executive Management Committee, a deliberative body of the Chamber of Foreign Trade (Camex), authorized an additional import quota of 450 thousand tons of wheat from outside Mercosur without a Common External Tariff (TEC) of 10 %.
This additional quota can be used until November 17 of this year, if 85% of the quota volume of 750 thousand tons per year currently allowed is filled. If the entire quota is used, the country's mills will import 1.2 million tons without a quota from outside the Trade bloc.The extended quota was a genuine request made by flour milling plants fearing that Argentine wheat supply is eventually falling short by the end of the year. But Ciara-CEC guarantees that this risk does not exist.
According to the entities 12.5 million tons was committed to exports by the country in 2019/20, about 5.5 million tons were or will be destined for Brazil.
Everything considered the Blacksea market can become an interesting option for the flour and bakery industries.
Exporters represented by the Vegetable Oil Industry Chamber and the Cereal Exporters Center (Ciara-CEC) sent protest notes to the Argentine government.
Although the export program with Brazil in this campaign is already well advanced, the decision affects the sale futures for the main Argentine buyer. Market losses for wheat originated in Argentina and questions about the economic integration of Mercosur and its main agreements are at stake.
Historically, Argentina supplied 90% of the volume of wheat imported by Brazil - which varies between 5 million and 6 million tons every year. But in 2019, the percentage was 85% with the expansion of Argentine exports to other markets, mainly in Asia.Last week, the Executive Management Committee, a deliberative body of the Chamber of Foreign Trade (Camex), authorized an additional import quota of 450 thousand tons of wheat from outside Mercosur without a Common External Tariff (TEC) of 10 %.
This additional quota can be used until November 17 of this year, if 85% of the quota volume of 750 thousand tons per year currently allowed is filled. If the entire quota is used, the country's mills will import 1.2 million tons without a quota from outside the Trade bloc.The extended quota was a genuine request made by flour milling plants fearing that Argentine wheat supply is eventually falling short by the end of the year. But Ciara-CEC guarantees that this risk does not exist.
According to the entities 12.5 million tons was committed to exports by the country in 2019/20, about 5.5 million tons were or will be destined for Brazil.
Everything considered the Blacksea market can become an interesting option for the flour and bakery industries.
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