Cepea, January 4, 2021 – Prices of wheat grain and byproducts oscillated in 2020; however, in general, they remained higher compared to previous years. As for the grain, values started the year in an upward trend, influenced by high dollar quotes, difficulties to import and the recent firm domestic demand. At the end of the year, on the other hand, the advance of activities on the field and the end of the harvesting pressed down quotes in the Brazilian market.
In February, the wheat supply was low in the domestic market, reducing liquidity in the month. From March to June, the combination of firm demand and high dollar quotes pushed up imports’ values. In spite of that, the pace of international trades was firm, given that the industry needed to replenish inventories. In this period, in order to mitigate costs, the government allowed imports of 450 thousand tons from outside Mercosur without TEC (Common External Tariff).
In the 2019/20 crop (from August/19 to July/20), imports totaled 6.67 million tons, downing 1.2% compared to the season before (August/18 to July/19), according to data from Secex. Exports, in turn, decreased 37.5% in the same comparison, due to the limited volume in Brazil.
In the second semester, prices were firm because of unfavorable weather conditions in South Brazil. In September, quotes decreased in Paraná, in light of the new crop harvesting. In Rio Grande do Sul, values also dropped, but less significantly – in this state, activities on the field start only in October/November. In this scenario, average prices in Paraná were atypically lower than in Rio Grande do Sul.
From October to November, prices in the domestic market increased, favored by refrained sellers, high dollar quotes (which boosts imports’ values) and the fact that purchasers were willing to trade. In December, quotes resumed moving down, pressed by refrained purchasers, who traded only small batches during the month – they were focused on the end of the harvesting in the South and were expecting new price drops. In spite of decreases, average quotes were still at high levels.
On the average of 2020, prices were higher than in 2019, in nominal terms. In the wholesale market (trades between companies), values rose 40.5% in Rio Grande do Sul, 36.4% in Santa Catarina, 35.4% in Paraná and 32.7% in São Paulo.
PRODUCTION – In December, Conab indicated that the area totaled 2.34 million hectares, 14.6% more compared to the season before. As for productivity, it can increase 4.7% in the same comparison. As a result, Brazilian production is likely to amount 6.18 million tons, 19.9% more compared to 2019, but 2.7% less in relation to the forecast up to November.
BY-PRODUCTS – In spite of concerns related to coronavirus, the supply of wheat flour and bran remained stable and the demand continued firm. It is important to highlight that end consumers increased the demand for pasta during the quarantine. As a result, quotes for wheat flour and bran remained high in 2020, also influenced by significant price rises of wheat grain.