August 26, 2019

Brazil will need to Import at least 7 Million Tons of Wheat

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

In their most recent monthly estimate of the wheat crop in the state of Parana, the Department of Rural Economics (Deral) left their estimate unchanged at 2.7 million tons. In their July report, they had lowered their estimate 500,000 tons compared to June due to several frosts that negatively impacted the wheat. There was more cold weather at the start of August, but it wasn't widespread or cold enough to cause significant damage.

The state of Parana is the largest wheat producing state in Brazil generally responsible for more than half of Brazil's wheat production. The second largest producing state is Rio Grande do Sul and these two states combined, are generally responsible for approximately 90% of Brazil's wheat production.

Brazil is one of the world's largest importers of wheat and before the frost, it was estimated that Brazil would import 7 million tons of wheat with the majority coming from neighboring Argentina. Now that the wheat crop is smaller than original estimated, it is possible that they will need to import more than 7 million tons of wheat. Conab is estimating the 2019 Brazilian wheat production at 5.4 million tons, which is basically unchanged from 2018.

Farmers in Parana have harvested 7% of their 2019 wheat crop. Last year, the state produced 2.8 million tons of wheat and the 2018 crop was also impacted by frost and dry weather.

Wheat is the only major crop for which Brazil is not self-sufficient. Brazilian scientists are trying to change that by developing new wheat varieties suitable for irrigated wheat production in central Brazil during the traditional dry season. They have had some success, but Brazil is not going to be self-sufficient in wheat production any time soon.