January saw record wheat exports to Arab countries

Data from the Market Intelligence area of the Arab / Brazilian Chamber of Commerce point out that in January this year, Brazilian exports of wheat and mixtures with rye to the Arab countries totaled US$ 26.78 million, the highest level ever recorded.  124,715 tons were exported in January and the main buyers were Saudi Arabia and Palestine.

According to Felipe Novaes, agribusiness analyst at Tendências consulting firm, the record is inserted in a broader context. Among the factors are the Brazilian supply, which is high due to the harvest period, and the appreciation of the dollar that makes the Brazilian product more competitive. There is also demand from the North Africa and Middle East (MENA) region and low supply in important producing countries.

Regarding Arab consumption, Novaes recalls that growth has occurred since last year. “Between 2020 and 2021, the USDA forecasts an increase in consumption of around 2.5% per year, on average, for North Africa and the Middle East, where the Arab countries are concentrated,” he pointed out. The rate is above the last five years when consumption growth in the region averaged 1.1% per year.

Also according to the USDA, to meet consumption needs, MENA nations must import more wheat. In the biennium that includes 2020 and 2021, the average growth in purchases should be 4.6% per year.

On the other hand, Brazil experienced a drop in production due to climatic problems which hindered commercialization in 2020. This year, the harvest that began to be harvested recently has been catching the breath of exports. “The development of Brazilian wheat in the current harvest was less impaired, so that producers are possibly taking advantage of the export opportunity window opened by the exchange rate at very high levels (real historically devalued against the dollar), precisely at the time of year where there is more new wheat available on the market, ”he said, recalling that the domestic supply should grow 24.9% according to a survey released by Conab in February.

The coronavirus pandemic has also affected the commercialization of wheat worldwide. “There are signs of the implementation of tariff and non-tariff barriers from important wheat-producing countries, since the pandemic context has generated increased concern about issues related to food security in the world,” explained the analyst, citing Russia, Ukraine as examples and Argentina. For Novaes, there is a tendency for these nations to start prioritizing domestic food security, reducing their exports.

Source: Brazil-Arab News Agency – ANBA

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