With prices at record levels, wheat area should increase in Brazil

Cepea, May 18, 2021 – Wheat prices rose sharply in the Brazilian market in the last 16 months and are currently at record levels, in nominal terms. The upward trend of wheat quotes was similar to that observed for other agricultural products, majorly those that compete for area, and in the international market too. Thus, the area allocated to wheat this year is expected to increase in southern Brazil, which produced almost 90% of all the Brazilian wheat output in 2020.

 

According to data from Cepea, the average prices paid to the wheat farmers in April were 62.1% higher than that in April/20, in nominal terms. In the wholesale market (deals between processors), quotes increased by 42.1%.

 

According to Seab/Deral, the area allocated to wheat in Paraná this year should be 3% larger than that in the previous season, totaling 1.16 million hectares. The average productivity is expected to be 17.4% higher than that in 2020, contributing to increase production by 21.7%, to 3.8 million tons. In Rio Grande do Sul, the wheat area is estimated to increase too, according to Emater/RS.

 

However, the dry weather and forecasts for low rainfall in the coming weeks are warning Brazilian wheat farmers. In the first fortnight of May, the unfavorable weather hampered sowing and the beginning of crops development.

 

In Paraná, data from Seab/Deral indicated that wheat was being sown on dry soil – until May 10, activities had reached 6% of the estimated area. According to Seab, until May 10, 70% of crops were in average conditions, with difficult and uneven germination. In Rio Grande do Sul, farmers were still focused on planning the season, purchasing inputs and preparing the soil.

 

PRICES AND MARKET IN BRAZIL – With supply low and prices high, the trading pace for wheat was slow in the Brazilian wheat market in the first half of May. Still, Cepea collaborators reported that demand increased slightly in that period, majorly from feed processors.

 

(Cepea-Brazil)

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