February 10, 2011

Brazilian Millers Say They Need to Import Better Quality Wheat

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

Responding to criticism by wheat producers in Rio Grande do Sul that millers are importing wheat into Brazil at the same time that there are 3 million tons of Brazilian wheat in the silos, the millers point out that they are importing wheat due to the generally poor quality of Brazilian produced wheat.

Wheat producers in southern Brazil are very upset about the Argentine imports while there is an oversupply of Brazilian wheat available in the domestic market. They are asking the federal government to take action to stem the imports or to step up their program of purchasing wheat from Brazilian producers at the guaranteed minimum price set by the government.

Brazilian wheat producers also complain that the standards set by the millers appear to change with little notice. Producing quality wheat in Brazil has always been problematic especially when there is heavy rainfall during the harvest season. That was not the case in 2010 when the quality of the crop was the best in recent years.

Producers feel the millers are importing wheat from Argentina because the strength of the Brazilian real compared to the Argentina peso makes Argentine wheat cheaper than Brazilian wheat.