São Paulo – Wheat exports in the crop that is currently being harvested in Brazil should be lower than those in the previous crop. The wheat sector market analyst at the National Food Supply Company (Conab), Paulo Magno Rabelo, believes that exports should reach just 1.2 million tonnes. In the period from August last year to July this year, which corresponds to the trade of the crop harvested in 2010, foreign sales were around 2.5 million tonnes. The reduction "may be a little greater, or a little smaller,” explained the analyst.
The contraction should show on the Brazilian trade balance with the Arab world. From August last year to July this year, the country exported 1.74 million tonnes of wheat to the Arab world, according to figures disclosed by the Ministry of Development, Industry and Foreign Trade. That is, the region received 68% of all the wheat the Brazilian sector exported in the period.
The current crop is now being harvested, according to the Conab, and should be 12.8% smaller than the previous crop. This is one of the main causes for the expected reduction in exports. Also weighing in the reduction is global offer, as Russia and the Ukraine, great producers, did not face crop problems this year. Last year, both countries faced droughts, which caused their exports to wilt, opening space for other producers, like Brazil.
National wheat production should drop from 5.8 million tonnes in the last crop to 5.1 million in the current crop. According to Rabelo, weighing in the reduction is the drought during the sowing season in the state of Paraná, hardships found by farmers to sell on the domestic market, frost during the flowering season and excessive rains during harvest time. Added to all this, over the last two years the production in the Mercosur, the customs union that includes Brazil, Paraguay, Uruguay and Argentina, has been higher than demand. In 2010, some 23 million tonnes were harvested, for a demand of 18 million tonnes. This year, production should be 21 million tonnes and demand should remain at 18 million.
Paraná and Rio Grande do Sul, the main producers of the commodity, have already picked some 80% and 30% of their wheat crops, respectively. Rio Grande do Sul, in fact, should overtake the state of Paraná this year, becoming the main producer in terms of wheat harvested, according to Rabelo. The state was one of the few that presented greater cultivation area. Different from Rio Grande do Sul, Paraná has a climate that is appropriate for cultivation of the second maize crop and most farmers in the region opted for that crop, instead of wheat, due to the good market perspectives.
Rio Grande do Sul is providing incentives to cultivation of the so-called “hard” or “bread” wheat, used in bread making, a better quality product than the “soft” variety. Exports of this kind of wheat, in fact, should continue growing in the current crop, according to Rabelo, despite the reduction in sector foreign sales as a whole. And Rio Grande do Sul, believes the Conab analyst, should continue expanding its “hard” wheat produce. “Planting for export is good business in Rio Grande do Sul,” he said. There is demand for this kind of wheat on the foreign market, according to Rabelo. The main producers are the US, Canada, Argentina and Australia.
*Translated by Mark Ament
