September 16, 2013

 

Brazil's hard red winter wheat import from Kansas rises
 

 

Brazil has purchased 2.35 million tonnes of hard red winter (HRW) wheat from Kansas since February 2013, worth around US$700 million, after wheat supply shortages in the Southern Hemisphere caused a shift in trade policy.

 

A temporary tariff change by one of the world's leading wheat importers, further extended just this week, means significant HRW sales for Kansas wheat farmers.

 

Brazil is South America's largest wheat importing market, but typically only purchases about 400,000 tonnes annually from the US, instead relying on fellow Mercosur member Argentina for the bulk of its wheat imports.

 

This year, both Brazil and Argentina's wheat crops fell short and this supply situation, combined with concerns of inflation in Brazil, resulted in a market opportunity for Kansas wheat farmers.

 

Brazil lifted a 10% common external tariff on wheat on April 1, 2013, including for the US, for a quota of 36.7 million bushels (1.0 million tonnes).

 

Brazil's government later extended the tariff-rate quota to 73.5 million bushels (2.0 million tonnes) through September 6.

 

On September 9, Brazil again extended the quota another 14.7 million bushels (400,000 tonnes) through the end of November 2013, signalling even more opportunities for HRW sales.

 

Brazil's revised tariff rate quota for this year is temporary, but it has provided for US wheat producers with an opportunity to gain new market access.