Brazil to import three million tonnes of wheat

Brazil will have to import about 3 million tonnes of wheat in 2010 from countries outside Mercosur, the main source of grain imports in the largest Latin American economy, said an industry group on Thursday. Abitrigo, as the industry group for wheat producers and importers is known in Brazil, expects demand for imported wheat to rise next year as output in Brazil and Argentina will probably shrink.
Abitrigo's board chairman, Luiz Martins, did not have an estimate for the imports of wheat that Brazil is likely to make in 2009 from outside the Mercosur trade block, which includes Brazil, Argentina, Uruguay and Paraguay.
The agriculture ministry reported Brazil imported 400,000 tonnes of wheat from the United States and Canada through September this year. Argentina traditionally has supplied Brazil with more than 90 percent of its wheat imports in past years but drought and export restrictions have kept Brazil from repeating this trend recently. Brazil's annual wheat demand is just over 10 million tonnes.
Grain trade among Mercosur countries is exempt from a 10 percent common import tariff that other import origins are subject to. In past years when wheat supplies in the region were limited, the government has suspended the tariff. Paraguay and Uruguay have helped make up for some of the shortfall in wheat imports from Argentina in the past two years. But the same rains that have been hurting Brazil's wheat harvest outlook are hurting Paraguay's as well.
"With 2 million tonnes from Argentina, plus 5 million tonnes of output from Brazil - which makes 7 million tonnes, it will be necessary to buy 3 million from some other places," Martins told Reuters before the opening of the 16th International Congress on Wheat in Sao Paulo.
These numbers may be turn out to be optimistic, depending on the final impact of the rainy weather that has been plaguing Brazil's harvest which is now peaking in the south. Martins said it was not possible to put a number on the losses to the domestic wheat crop to rain yet but added that there was a clear drop in quality which would transform large amounts of wheat for human consumption into animal feed.