“Generally, Brazil receives about 6 million tons from Argentina,” said Fabio Lima, StoneX’s risk management consultant. But now he expects between 1 and 1.5 million tons of imports from outside Mercosur.
Brazil is one of the largest importers of wheat in the world, with domestic consumption of more than 12 million tons per year.
In terms of the 2021-2022 business year that ended in July, Brazil imported some 155,000 tons of wheat from non-Mercosur countries. In turn, the previous year it bought almost 900,000 tons from the United States, Canada and Russia, according to government data.
In addition to the drought in Argentina, Brazil’s main producing state, Paraná, is facing excessive rainfall, which is also compromising domestic supply.
The Mercosur Common External Tariff is zero for imports of some products this year, including wheat. Brazil also has an annual wheat import quota of 750,000 tons that is exempt from tariffs.
Lima said it is difficult to estimate the amount of wheat that will come from outside Mercosur. He cited rumors of a possible shipment from Russia, but could not elaborate.
Carlos Cogo of Cogo Intelligence cited the United States, Canada and Russia as possible alternative suppliers to Brazil. But he warned that buying from them will be expensive, which could fuel domestic inflation.
According to Cogo data, Argentina has already sold nearly 9 million tonnes of its 2022-2023 crop, leaving very little additional supplies and driving up prices.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
