South America Calling

Brazilian 2015 Wheat Imports Seen Down, For Now

Brazil is currently seen importing less wheat in 2015, although recent rain and frost losses in the south may change that.

Imports in the first eight months of the year are 20% down on the year at 3.3 million metric tons (mmt) amid a decline in consumption, forecasts of a larger domestic crop and rising prices due to the devaluation of the real.

As a result, the Brazilian Wheat Millers Association (Abitrigo) currently expects Brazil to import 5 mmt this year, down 13.5% on the year before.

However, these figures are based on the current Agriculture Ministry 2015 wheat forecast of 7.1 mmt, up 18% on last year, which doesn't fully take into account recent weather issues in the southern states of Parana and Rio Grande do Sul.

Output could end up at around 6 mmt, said Sergio Amaral, president of Abitrigo, at a press conference Thursday. But even if it does, Brazil will still probably produce 50% of what it consumes,

"Producing 50%, we are in line with previous years," he told journalists.

It's been another tough year for Brazilian wheat farmers. Torrential rains across Parana in July and in Rio Grande do Sul in August and September hurt the crop. Then further losses were suffered after a heavy frost descended on Rio Grande do Sul wheat fields two weeks ago.

Meanwhile, Brazil's milling industry is being badly hurt by the dramatic devaluation of the Brazilian real over the last year, which has accelerated over the last month.

The 40% decline of the real against the dollar has obviously made imports more expensive, but it has also pushed up local prices that are linked to those in Buenos Aires, Argentina.

"Prices have gone up across the board," said Amaral.

Historically, Brazil has been a captive market for Argentine wheat imports, although policies that limit supply have forced it to seek supplies from elsewhere in recent years.

Out of the 3.3 mmt that Brazil imported in the first eight months of 2015, some 2.7 mmt came from Argentina, while some 295,339 metric tons originated the U.S.



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