Brazil, one of the world's largest wheat importers, is expected to buy less of the cereal in the new season that starts in August because of a favourable outlook for local production, broker and analyst INTL FCStone said on Wednesday. FCStone sees imports in 2019-20 (August-July) falling to 5.7 million tonnes from 7 million tonnes in 2018/19. The analyst sees potential for local production to increase to 6.6 million tonnes in the new season, compared with 5.6 million tonnes in the previous crop, as higher prices are expected to boost planting intentions.
Brazil will allow the United States to export 750,000 tons of American wheat with no tariffs, the government said during an official visit by President Jair Bolsonaro to Washington on Tuesday.
Initially, the White House statement said the quota was for US wheat, but later Brazil's Agriculture Minister Tereza Cristina Dias clarified that all suppliers would be entitled to use the quota.
Brazil buys most of its wheat from Argentina, its neighbor and Mercosur trade bloc partner. Countries in that bloc were already able to sell wheat to Brazil with zero tariff. Argentine and Brazilian farmers worried about the new quota.
Despite being an agricultural powerhouse, leading global exports of soyabeans, coffee, sugar and ranking number No. 2 in corn, Brazil does not produce enough wheat for its own consumption. FCStone projected consumption at 11.6 million tonnes in 2019/20, 200,000 tonnes more than in the previous season.