With prices currently high in BR, farmers increase wheat area, and production may be a record

Cepea, June 16, 2021 – Despite the recent devaluations, considering the last 12 months, wheat prices increased sharply in the Brazilian market. This scenario is in line with that observed in the international market and for the import parity. As a result, an increase in the area allocated to wheat was already expected, largely in southern Brazil.

 

Thus, according to data from Conab (Brazil’s National Company for Food Supply), the area with wheat in 2021 is estimated to be 8.1% larger than that in the 2020 Brazilian season, totaling 2.53 million hectares. Productivity may grow by 3%, resulting in an output 11.3% higher, at 6.94 million tons, a record.

 

Despite the higher production estimates, wheat imports between August/21 and July/22 continued forecast at 6.4 million tons. Thus, the domestic availability was revised up to 13.45 million tons, a slight 0.2% up from that in 2020. Exports estimates were kept at 600 thousand tons, as that reported in May. Thus, ending stocks, in July/22, may be the highest since 2018, totaling 732 thousand tons.

 

BRAZILIAN MARKET IN JUNE – Deals continued sporadic in the Brazilian market in the first fortnight of June. Agents from mills claimed to have inventories, and the demand for wheat flour continued low. Cepea collaborators reported that the demand from feed processors in Rio Grande do Sul increased. It is worth to highlight that wheat imports continue advantageous to Brazilian purchasers.

 

IMPORTS – According to data from Secex, in May/21, Brazil imported 590.569 thousand tons of wheat, 26.3% up from that in April and 26.5% more than that in May/20. Of the total volume imported, 77.11% came from Argentina; 15.22%, from Uruguay; 7.64%, from Paraguay; and 0.02%, from France.

 

(Cepea-Brazil)

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