August 29, 2013
Brazil becomes second largest market for US wheat
After Argentina imposed wheat export restrictions which curtailed exports to Brazil, Brazil emerged as the second-largest market for US wheat, after China in the 2013-14 marketing year.
The USDA indicated through August 22, exports and undelivered sales of US wheat to Brazil totalled 1,782,500 tonnes, compared with 50,000 tonnes by the same date a year earlier. The 2013-14 marketing year began on June 1.
Brazil long has been one of the world's largest wheat importers but has been able to purchase most of its import requirements from neighbouring Argentina. Brazil imported 7.4 million tonnes of wheat in 2012-13 and was forecast to import 7.5 million tonnes in 2013-14.
In most years, US wheat exports to Brazil have been miniscule. But Brazil turned to the US for supply this year because of export restrictions imposed by the Argentine government in response to rising domestic wheat prices in the wake of a drop in wheat production in 2012-13. The 2012-13 Argentine crop was 10 million tonnes, which was the nation's smallest wheat outturn since 1995-96. The forecast for Argentina's 2013-14 wheat production was 12 million tonnes. The recent five-year average Argentina wheat outturn was 13.1 million tonnes.
Argentina's wheat exports in 2012-13 totalled four million tonnes, down from 12.9 million tonnes in the previous year. The forecast for Argentina's 2013-14 wheat exports was six million tonnes. USDA August wheat outlook states that despite good planting conditions in the south, uncertainty about government interventions and export policy caused a drop in the projected area partly in favour of barley."
The International Grains Council in its most recent Grain Market Review said, "With limited availabilities from Argentina, Brazil has turned to other origins to meet its needs, aided by the suspension of the 10% duty on non-Mercusor imports until August 31. Brazil's demand for US wheat has been particularly strong and has contributed to stronger early-season US sales than expected."