(NDAgConnection.com) – Brazil will need to seek alternative wheat sellers because Argentina’s crop failure has curtailed production and compromised its ability to export, analysts said, pointing to the United States, Canada and even Russia as possible suppliers.
According to Reuters, Brazil is a net wheat importer and neighboring Argentina, which is currently suffering a drought, is its most important source of the cereal.
“Generally, Brazil gets about 6 million tonnes from Argentina,” said StoneX risk management consultant Fabio Lima. But now, he expects between 1 and 1.5 million tonnes of imports coming from outside Mercosur, the South American trade bloc.
Brazil is one of the world’s largest wheat importers, with domestic consumption above 12 million tonnes per year, below its output capacity.
In the 2021 to 2022 commercial year that ended in July, Brazil imported only about 155,000 tonnes of wheat from countries outside the Mercosur. In turn, the year before, it purchased almost 900,000 tonnes from the United States, Canada and Russia, according to Brazilian government data.
Aside from the drought in Argentina, Brazil’s key producer Parana is facing excessive rains, also compromising domestic supplies.