For the first time in decades, Brazil imported more U.S. wheat than any other country in the 2013/14 marketing year that ended May 31, 2014. Looking ahead, a logical question is whether Brazil will continue buying more U.S. wheat now that the door of opportunity is open. The answer, according to a high-volume wheat buyer, is “yes” — at least until the quality of Brazil’s large 2014/15 crop and Argentina’s production are known.
Brazil’s average annual wheat imports of around 7.1 MMT make it one of the world’s top wheat buyers. Wheat produced in Brazil is soft to semi-hard and millers need to blend it with higher protein hard wheat to produce flour with the characteristics to make Brazil’s preferred French-style bread products. Brazil used to originate most of that wheat from the United States before the Mercosur free trade agreement in South America allowed millers to import Argentine wheat duty free, while established a tariff on wheat from non-Mercosur countries like the United States.
Brazil's government was applying the tariff at 10 percent of the FOB price in 2012/13 when it became clear that Argentina’s wheat production was poor and the Argentine government severely restricted wheat export licenses. Brazilian millers successfully petitioned their government to suspend the tariff and USW provided the information millers needed to turn to U.S. wheat.
“I want to congratulate you and the state wheat commissions represented here for doing such a good job helping our flour millers last year,” said Edson Csipai, the head wheat buyer with Bunge Alimentos in São Paulo, Brazil, on June 10, 2014, at the U.S. Wheat Associates (USW) board of director’s meeting in Omaha, NE. He also noted that until millers know the quality of this year’s Brazilian wheat crop — and whether Argentina can deliver sufficient supplies — he expects Brazil will need at least 1.3 MMT of HRW in the first half of 2014/15. That would be nearly 37 percent more than Brazil’s five-year average annual U.S. wheat imports. In 2013/14, however, Brazil's millers imported almost 4.3 MMT of U.S. wheat, the majority of which was HRW.
Csipai was in the United States as part of a trade team of Brazilian millers who visited farms in Maryland and Kansas, meeting with commercial elevator managers and seeing the USDA grain inspection system. The trade team is one of several activities sponsored by USW and state wheat commissions to help Brazil’s millers fully understand the long-term value of the U.S. HRW and SRW supply.
“I certainly cannot suggest we will have problems getting wheat from Argentina again this year,” Csipai said. “But it has been raining quite a lot in the main wheat growing region there. It is good to know that farmers here in the United States always produce enough wheat and we can get the information we need from USW to buy what we need with confidence.” or Brazilian Flour Millers.
Source : uswheat.org