June 15, 2007

 

North Brazil importing Canadian wheat on supply restraints

 

 

Wheat milling companies in Brazil's northeast are importing wheat from Canada to make up for local supply restraints, industry leaders said Thursday (Jun 14).

 

Brazil's wheat milling industry association, Abitrigo, said companies would have to look elsewhere for wheat following a slowing of Argentine wheat exports in March.

 

Abitrigo said some millers were looking to Canada, US and Russia for wheat. But wheat imports from those nations are either so small, or non-existent, that they do not register on the government's list of top 100 import items from any of those three nations.

 

"I've heard some millers have been importing small volumes from Canada these past weeks," said Fernando Ribeiro de Souza, a wheat buyer from milling company Anaconda in south Brazil.

 

"We are still importing from Argentina despite the alleged suspension. There's nothing left in the local market to buy," he said.

 

Brazil imported 2.2 million tonnes of wheat from Argentina from January to April, according to the Brazilian Trade Ministry. Volume is up 63 percent on the year because of tight supply in Brazil. Brazil consumes around 800,000 tonnes of wheat per month.

 

"Some northeast millers are importing wheat because it is closer to North America than we are here in the south. Southern millers are still buying from Argentina or finding what's left in the local market," said Luis Quimelli, director of Agricampo, a wheat brokerage in Parana state, Brazil's leading wheat producer.

 

Brazil is currently growing its 2007/08 wheat crop. The Agriculture Ministry estimates a roughly 4-million-tonne harvest.

 

Brazil is a net importer of wheat.

 

"We will have to import from other markets and this will have consequences in the local market, with wheat prices rising by at least 30 percent," Abitrigo's president Samuel Hosken said in early March when Argentina announced it would slow wheat exports to Brazil in favour of wheat flour exports.

 

Argentine wheat enters Brazil duty-free while Canadian wheat must pay at least a 10 percent tariff. Brazil and Argentina are both members of the Southern Cone Common Market, or Mercosur.