Wheat supply is low in Brazil; volume imported is the highest since July/18

Cepea, May 20, 2020 – With the low wheat supply in the Brazilian market, imports stepped up in the last two months, despite the strong dollar. According to data from Secex, in April, Brazil imported 748.2 thousand tons of wheat, 13.4% more than that purchased in March and 20.9% above that imported in April/19. That was also the highest amount purchased from the international market since July/2018.

 

Of the total volume imported in April, 94.3% came from Argentina and 4%, from Uruguay. The remaining (1.7%) came from Paraguay. Between August/19 and April/2020, Brazil imported 5.26 million tons of wheat, less than that purchased in the same period last season (5.37 million tons).

 

The average price for the product imported last month was similar to that from March, at 214.55 USD per ton, but 10.4% lower than that from April/19. However, considering the currency exchange rate – which, in April, hit a nominal record, averaging 5.33 BRL –, prices in Real were 8.7% higher than in March and 22.5% above that in April/19. Now, when prices in Real are deflated (by the IGP-DI), the current price levels for the product imported are the highest since October 2018.

 

CROPS – In Brazil, data from Seab/Deral indicate that, in Paraná, sowing has reached 17% of the area allocated to wheat, at 1.079 million hectares. It is worth to mention that 67% of the crops are in good conditions and 33%, in average conditions.

 

BY-PRODUCTS – In early May, prices for all types of wheat flour increased in Brazil, due to the low supply of wheat grain. Agents from mills seemed to have inventories only for the short-term and, thus, are trying to close new deals to replenish inventories.

 

According to Cepea collaborators, the demand for wheat flour for domestic use was growing in the first fortnight of May, due to the social distancing advice to prevent covid-19 from spreading out. On the other hand, agents from the market reported that specific market niches lowered the demand for wheat flour, such as coffee shops, pizza places and bakeries. In the market of wheat bran, demand continued high, mainly for feed in southern Brazil.

 

(Cepea-Brazil)

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