Despite low liquidity in Brazil, prices continue firm in March

Cepea, April 1st, 2021 – The trading pace was slow in the Brazilian market of wheat in March. Sellers consulted by Cepea were more interested in selling the product in stock, since they need room in warehouses to receive the summer crop. On the other hand, agents from mills reported to have wheat stocked and that the demand for wheat by-products is low. Still, prices continued firm.

 

In March (until March 26), the average price for wheat in the wholesale market of SP closed at 1,556.16 BRL per ton, 1.9% up from that in February and 45.3% higher than that in March/2020, in nominal terms. In Paraná, the average closed at 1,517.35 BRL/ton, 1.8% up in the monthly comparison and 45.1% up in the annual comparison. In Santa Catarina, the average price for wheat in March closed at 1,527.79 BRL/ton, 1.6% and 61.7% up, respectively, in nominal terms. In Rio Grande do Sul, the average closed at 1,453.29 BRL/ton, 0.5% higher than that in February and a staggering 61.9% up from that in March/20, in nominal terms.

 

In general, purchasers are uncertain about consumption amid the increase in restrictive measures to fight covid-19 in Brazil and the delaying of the new emergency aid. According to data from Conab (Brazil’s National Company for Food Supply), from August/20 to July/21, the domestic demand for wheat is estimated at 11.6 million tons, 7% down from that in the two last years. For July/21, the inventory/consumption ratio is forecast at 4.9%, against 1.8% in July/20.

 

Data released by Deral estimate wheat production in Paraná to total 3.77 million tons in the 2020/21 season (to be harvested in 2021), 21.07% up from that in the previous season. The area allocated to wheat crops was revised up to 1.14 million hectares, 1.6% larger than that in the 2019/20 season. Sowing in Paraná is forecast to begin from April onwards.

 

(Cepea-Brazil)

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