September 30, 2013


Argentina to supply wheat to Brazil


In expectation of wheat surplus, Argentina is poised to supply neighbouring Brazil's imports in the coming harvest, eliminating the need for surging purchases from the US.


Argentina expects a six-million-tonne surplus out of a 12-million-tonne 2013-14 crop that growers will start harvesting next month, allowing it to ensure supplies to Brazil, Brazilian Agriculture Minister Antonio Andrade said.


Daniel Bestty, a spokesman for Argentine Agriculture Minister Norberto Yauhar, said he could not immediately comment on the country's outlook for the crop and exports.


"If they can get to that output we won't need to import any more wheat from outside the Mercosur," Andrade said in an interview in Brasilia, referring to the trade bloc led by the two South American countries. "We will only seek wheat purchases from elsewhere in case they have any output losses."


Brazil's imports of US wheat surged 46-fold this year through August to 1.46 million tonnes after domestic output declined and Argentina, traditionally the main supplier of the grain, restricted exports to ensure local supply. Purchases from Argentina slumped 30% to 2.5 million tonnes in the same span.


About 15% of Argentina's planted wheat crops were harmed this week by frost, said Juan Ignacio Dreiling and Aldana Ferradas, analysts from Buenos Aires and Bahia Blanca Grains Exchanges, respectively.


Wheat crops in the Bahia Blanca area, which produces 50% of Argentina's wheat, weren't affected by frost because they are in an early development stage, Ferradas said. The grain is growing healthy, received good rainfall, and yields should rise if rain continues without frost, he said.


Argentina halted wheat exports in December to meet domestic demand estimated at about six million tonnes after the 2012-13 crop amounted to 8.2 million tonnes, the lowest in more than three decades.


Brazil scrapped an import tax on wheat from outside the Mercosur trade bloc to meet internal demand for a maximum of 2.7 million tonnes to be imported until November. The US became the biggest wheat exporter to Brazil in July and August, according to data from the country's Trade Ministry.


According to government data, about 26% of the wheat output was cut due to frost in July in the southern Brazilian state of Parana, the biggest growing area for the grain in the country.