February 1, 2012

Spain to import more Brazilian wheat under EU quota

Spain has imported some wheat from Brazil and expects more under a special EU quota, along with usual wheat supplies from Ukraine and Russia, port and trade sources reported.

 

The EU has awarded permits to import 1.2 million tonnes of low- and medium-quality wheat from outside the US and Canada under its tariff-rate quota (TRQ) system.

 

The roster for Tarragona, the leading grains port in major grain importer Spain, shows a cargo of 49,600 tonnes of wheat is currently unloading.

 

"It's Brazilian," a port source said. "It's come in under the TRQ, otherwise costs would be punitive. We expect two more Panamax cargoes in February, i.e. of more than 50,000 tonnes."

 

Spanish dealers have been keenly awaiting TRQ wheat in the hope it will temper recent price rises they are finding hard to pass on to animal feed makers and livestock farmers.

 

Brazil has a structural wheat deficit but usually has a surplus of feed quality wheat, of which it exported a record amount of some 2 million tonnes last year.

 

"Some Brazilian wheat was sold a while ago. It's covered by the TRQs, that are why they've brought it in now," a dealer said.

 

Spain rarely buys Brazilian wheat, although in June last year 15,000 tonnes was re-exported to Algeria from Tarragona. The cargo had originally been bound for Libya but had to be diverted due to the conflict.

 

Excluding the Brazilian cargo, Tarragona silos held an estimated 210,000 tonnes of wheat, of which consumers were loading about 8,000 tonnes a day.

 

Tarragona also unloaded 76,000 tonnes of feed wheat from Ukraine in January, as well as some 40,000 tonnes from Denmark and 30,000 tonnes from Russia.

 

Another 95,000 tonnes of Ukrainian wheat are expected in February, and possibly 50,000 tonnes each from EU members Bulgaria and Romania.

 

"With what there is in stock and unloading, we have enough to last through February, and with the February roster we have enough for March," the source said.

"This means that a hefty amount of merchandise will have to come before the March 31 deadline to supply April and May usage, and tie us over to the domestic harvest."

 

Spanish farmers usually begin harvesting winter planted wheat in June. Even with a bumper crop, Spain needs to import 10 million tonnes a year to meet demand, making it a market that lures interest from sellers around the world.

 

Corn arrivals in January were lighter than wheat as it is in less demand with 65,000 tonnes from Ukraine and 13,000 tonnes from Russia.

 

Tarragona is in the north-eastern region of Catalonia, which is home to much of Spain's pig feed industry, the largest in Europe.