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Brazil Wheat Update

07 May 2010
USDA Foreign Agricultural Service

BRAZIL - Brazilian feed wheat 2009/2010 exports may exceed 1 million metric tons, accoprding to the USDA Foreign Agricultural Service.

Of the 5 million tons of wheat produced in the country's 2009 harvest at least 30%, or about 1.5 million tons, had serious quality problems due to rain at harvest.

This poor quality crop, which brought widespread dissatisfaction to the milling industry, will increase Brazilian wheat exports to record levels this year.

In the first quarter, wheat shipments of products, mostly intended for animal feed, were three times higher than the same period in 2009.

According to the Foreign Trade Secretariat (Secex) between January and March 2010 exports totaled 755,460 tons, against 232,000 in the first quarter of 2009.

The market sources expect that exports will exceed 1 million tons in 2010.

Since Brazilian wheat is not competitive in global markets, government support via the Premium for Marketing of Products (PEP) program is being used to export low-quality supplies and support domestic producers.

The PEP assists in the flow of grain from production areas to consumption areas (both inside of Brazil and overseas).

It is expected that all exports this year will be executed under PEP. The PEP is not considered an export subsidy since the recipient is not required to export the product.

Further Reading

- You can view the full report by clicking here.

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