Cepea, May 5, 2020 – Prices for wheat and its by-products increased in the Brazilian market in April, underpinned by lower supply. Imports, in turn, have been expensive, due to the strong dollar. In this scenario, wheat purchasers are pressing the Brazilian government to facilitate wheat imports, primarily from Argentina.
In order to lower costs, many purchasers are claiming for a reduction in the imports’ tariffs on the wheat from Argentina. Currently, it is in force a tariff-free wheat import quota of 750,000 tons on wheat from outside the South American trade bloc Mercosur, which should expire in May.
Until the last week of April, Brazil had imported 546.6 thousand tons of wheat, with a daily average 15.95% higher than that in April/19 – it is worth to mention that the average price in dollar was 10.9% lower than that in April/19.
As regards the Brazilian wheat crop, in Paraná (PR), according to Deral/Seab, the area allocated to wheat in the 2019/2020 season should be 5% larger, totaling 1.02 million hectares. If the weather is favorable, supply may be 63% higher than that last year, reaching 3.49 million tons. However, it is worth to mention that the 2018/19 crop was disfavored by the weather.
As regards prices, in the wholesale market of PR, the average wheat price is at 1,217.33 BRL per ton; in Santa Catarina (SC), at 1,103.09 BRL/ton; in Rio Grande do Sul (RS), at 1,064.78 BRL/ton; and in São Paulo (SP), at 1,219.27 BRL/ton. In all these regions, prices hit nominal records in April in the respective Cepea series.