Oct 22, 2009
Canada Temporarily Takes Over Lead As Main Supplier Of Wheat To Brazil
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
During 2009, Brazil has thus far imported 4.1 million tons of wheat, which is 12% less than the 4.7 million tons imported during the same period in 2008. The traditional supplier of wheat to Brazil is neighboring Argentina, but export restriction imposed by the Argentine government has severely limited the amount of wheat available for export. As a result, Canada has temporarily taken over the lead as the principal supplier of wheat to Brazil. During August and September, Canada exported 131,000 tons of wheat to Brazil followed by 106,000 tons imported from Paraguay, 72,000 from Uruguay, 26,000 tons from the U.S. and 31,000 tons from Argentina. The average price of wheat imported to Brazil during September was US$ 246 per ton compared to US$ 256 in August and US$ 324 in September of 2008.
Last week the Argentine government once again opened up export registrations for wheat, but only a limited amount of grain was made available. In recent years, the opening and closing of export registrations for various products from Argentina such as corn, wheat, beef, and milk has put Argentina in the category of being an unreliable supplier of those products. As a result, importers have sought out other more reliable suppliers of those products. The export restrictions imposed by the government have also distorted the domestic prices of those same products. Without an export component, the domestic market is generally oversupplied resulting in lower prices. The Argentine government continue with these policies because they are more concerned about holding down domestic inflation than they are about increasing exports.