The president of Conab, Brazil's National Commodities Supply Corp., told a local newswire Tuesday that he expects Brazil to import 7.8 million metric tons of wheat in 2007 due to 2006 winter wheat domestic losses.
Argentina, Brazil's traditional top supplier of wheat, is expected to harvest 12 million tons, down four from the initial estimate of 16 million. Jacinto Ferreira says Brazil will probably have to turn to non-traditional suppliers in the Brazilian market, singling out Canada as a country that Brazil will buy more wheat from in 2007.
Currently Brazil imports the vast majority of its wheat from other South American countries and Southern Cone Common Market, or Mercosur, trade partner. The government may change wheat import tariffs for non-Mercosur nations.
In the 2006 crop, Brazil produced less than 3 million tons of wheat, down from original estimates at 4.8 million tons. In September, a surprise cold front destroyed nearly a third of the wheat crop in Brazil's second leading wheat state and the leading state making similar estimates. Brazil consumes about 19.5 million tons of wheat each year.
Luis Quimella, a head broker at a Brazil wheat trader, says that Brazil would import from the U.S. if its prices were more competitive.
"It's going to come from whoever can supply us with the right price," Quimelli says.