Reduced supply of wheat boosts Brazilian imports from Argentina

Players in the Brazilian milling market are facing a challenge due to the scarcity of type 1 wheat domestically. According to information released by the Center for Advanced Studies in Applied Economics (Cepea), the domestic supply of high-quality wheat is low, driving the search for alternatives, including more imports from Argentina.

According to data compiled by Cepea, the demand for type 1 wheat has grown considerably in Brazil; however, the domestic supply has not been able to meet this increasing demand. Faced with this situation, sector agents have turned their attention to the Argentine market, where not only is the cereal’s quality in line with the requirements, but prices also prove to be more competitive than those in Brazil.

According to reports from the National Supply Company (Conab), from March 11th to 15th, the import parity of wheat from Argentina was calculated at US$ 229.55 per ton, with delivery in Paraná. Considering the average exchange rate for the period, R$ 4.9814 per dollar, the price of imported wheat reached approximately R$ 1,143.46 per ton. In contrast, the average price of wheat produced in Brazil, for the same period and location, was R$ 1,240.38 per ton, according to Cepea data.

The following chart shows Brazil’s wheat export volume month-on-month between January 2022 and January 2024, according to DataLiner data.

Brazilian Wheat Imports | Jan 2022 – Jan 2024 | WTMT

Source: DataLiner (click here to request a demo)

In Rio Grande do Sul, the situation remains similar, with the parity of Argentine wheat established at US$ 214.47 per ton, equivalent to about R$ 1,068.34 per ton, while the average price of domestic wheat, according to Cepea, reached R$ 1,184.60 per ton.

Source: Agrolink

Click here to read the original report: https://www.agrolink.com.br/noticias/oferta-reduzida-de-trigo-de-qualidade-impulsiona-importacoes-brasileiras-da-argentina_489563.html

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