Brazil Turns To US For Wheat
Brazil, the world's third largest wheat importer, bought 51,000 MT of US wheat last week, that's more US wheat than it bought in the entire first six months of the year, despite a 10% import tax imposed by the government on purchases from outside the Mercosul bloc.
Brazil's normal favoured wheat supplier is Argentina, but they of course have had a disastrous 2008 crop and are about to conclude the planting of another one.
With the Brazilian real strengthening against the dollar, millers that are being forced to look outside Mercosul for supplies are finding US wheat fitting the bill quite nicely.
The government would rather like Brazilian flour millers to take Russian wheat, and there has been some talk of them maybe even relaxing the import tariff specifically on Russian wheat in exchange for them buying Brazilian meat.
The millers on the other hand are wary of the quality of Russian grain, and would prefer to stick with US, Canadian or Australian wheat.
With an import requirement of around 6 MMT per annum, and Argentina unlikely to be a seller at all during the 2009/10 marketing year, that leaves Brazil looking like a significant new home for the major wheat exporting nations to fight over.
Brazil's normal favoured wheat supplier is Argentina, but they of course have had a disastrous 2008 crop and are about to conclude the planting of another one.
With the Brazilian real strengthening against the dollar, millers that are being forced to look outside Mercosul for supplies are finding US wheat fitting the bill quite nicely.
The government would rather like Brazilian flour millers to take Russian wheat, and there has been some talk of them maybe even relaxing the import tariff specifically on Russian wheat in exchange for them buying Brazilian meat.
The millers on the other hand are wary of the quality of Russian grain, and would prefer to stick with US, Canadian or Australian wheat.
With an import requirement of around 6 MMT per annum, and Argentina unlikely to be a seller at all during the 2009/10 marketing year, that leaves Brazil looking like a significant new home for the major wheat exporting nations to fight over.