Linked In
News In
Linked In

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Brazilian wheat imports to hit lowest since at least 1990s

Twitter Linkedin

Brazil spoiled an improved world wheat demand picture by revealing that its own imports will fall to the lowest since the 1990s, undermined by a harvest upgraded to an even higher record top.

Conab, the official Brazilian crop bureau, cut by 200,000 tonnes to 5.10m tonnes its estimate for Brazil's wheat imports in 2016-17 – the lowest figure on data going back to the late 1990s.

The downgrade followed a series of upbeat headlines for wheat import demand, with Saudi Arabia, one of the world's top buyers, revealing a tender for 715,000 tonnes of the grain, while Ethiopia tendered for 70,000 tonnes.

Separately, India, where wheat prices hit a record high last month, cut its 10% import tax, fuelling ideas that the country's harvest this year was well below the official estimate.

Indeed, some observers believe that India's purchases will hit 5m tonnes this season - a figure now in line with that of Brazil, which is a structural importer of the grain, contrasting with its huge exports of the likes of corn, soybeans and sugar.

'Surprising results'

Conab said that its cut to the export forecast reflected a harvest which now looked like reaching a record 6.70m tonnes - 400,000 tonnes more than expected last month, and a 21% jump year on year.

Conab estimates for Brazilian wheat production and (imports)

2016-17: 6.697m tonnes, (5.100m tonnes)

2015-16: 5.535m tonnes, (5.518m tonnes)

2014-15: 5.971m tonnes, (5.329m tonnes)

2013-14: 5.528m tonnes, (6.642m tonnes)

2012-13: 4.380m tonnes, (7.010m tonnes)

The Rio Grande do Sul harvest was heading towards its final chapter "with surprising results", in terms of both quality and yield, "despite climatic adversities during the growing season".

Parana, where the harvest is nearly over, "crop obtained an excellent yield" which, at 3.14 tonnes per hectare, was 25% higher year on year.

"The quality of the grain is also worth mentioning in this harvest, since most of the harvest has… excellent results in the analyses of falling number and gluten strength".

Argentine dominance

Indeed, Conab highlighted the extent of Brazilian "production of good quality wheat" this year as an extra depressant to import prospects, with the country typically buying in particular milling grain for food needs.

And what Brazil does need will be sourced largely from default supplier Argentina, which is also enjoying a decent harvest.

"The supply of wheat in Mercosur will be wide, with production in Argentina expected to increase from 11.3m tonnes to 14.4 million tonnes, supplying the market with good quality wheat," Conab said.

"With this, this country [Argentina] will have a surplus of 8m tonnes, requiring the continuation of its good export performance, as has already been observed recently," to avoid a rise in stocks.

Argentina is expected to export about half of that surplus to its neighbour, equivalent to a 78% share of Brazil's imports in 2016-17, up from 65% last season.

Indeed, the data imply just 1.1m tonnes being left for other origins, which typically include Paraguay, Uruguay and the US.

By Mike Verdin

Twitter Linkedin
Related Stories

Evening markets: speculator data sink sugar and wheat prices - but fuel gains in corn

... while an Indian import tax hike sends palm oil tumbling, and hurts many other oilseed contracts too. But soybean futures show resolve

Corn prices 'may rally' - thanks to hedge funds' record selldown

Commentators raise alarm over hedge funds record net short in corn. Will speculators keep closing short bets on wheat and sugar?

Morning markets: India move sends palm oil tumbling. Fund data weaken wheat

A week that will bring Thansgiving to the US starts on a somewhat soft note in Chicago, and a definitely negative one in Kuala Lumpur

Weekly grain, oilseeds market view from Europe

What does Vivergo ethanol plant shutdown mean for UK wheat?... Eu wheat export prospects... EU rapeseed imports...
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069