September 20, 2004

Brazil Announces Wheat Crop Support Program

Brazil's Ministry of Agriculture on Thursday announced a series of measures to support wheat prices on the local market, the Ministry said in a statement.
 
Ivan Wedekin, the ministry's secretary for agriculture policy, said the government's objective is to guarantee farmers a minimum price for their wheat of 400 Brazilian reals ($1=BRL2.87) per metric ton.
 
"Wheat prices have already dropped below BRL400. We are going to guarantee income for (Brazil's) second largest wheat harvest in history," Wedekin said.
 
Brazil's 2004 wheat harvest is estimated at 6.1 million tons, second only to the 6.2 million 1986-87 crop.
 
The government said that it would buy as much as 800,000 metric tons of wheat through put options.
 
The government also plans to buy 200,000 tons directly from producers to
replenish its wheat reserves. The wheat will be purchased at weekly auctions.
 
The Ministry said that it will offer credits to producers in the states of Rio Grande do Sul, Santa Catarina, Parana and Mato Grosso do Sul to sell their wheat in northern and northeastern Brazil, regions which normally import wheat from Argentina.