March 16, 2007

Argentina's discontinued wheat exports ups Brazilian wheat prices to 16 percent
 

Sales in the wheat market in Parana state in Brazil have stopped due to the suspension of wheat exports from Argentina.

According to the Brazilian wheat analyst Benedito de Oliveira of AgRural, the producers that still have stock on hand increased prices to levels that flour mills refuse to pay. According to the study, the wheat farmers want at least R$500 (US$238.10) per tonne, which is at least 16 percent higher than prices two weeks ago, when the Argentine government prohibited wheat exports.

He said wheat was being sold at R$430 (US$204.76) fifteen days ago without specifying the volume still in the stocks of wheat producers and dealers.

Oliveira said the owners of the stocks are in a favourable position to negotiate, since they also have soybeans and corn to negotiate on the market.

He said that this week few wheat operations were negotiated, and only with smaller flour mills will be subjected to higher prices.

Oliveira believes that bigger industries can wait at least one month without making new purchases of wheat. They will be receiving shipments which they had previously negotiated with Argentine producers.