Prices decrease in 2023, but move up at the end of the year

Cepea, January 3rd, 2024 – In early 2023, the domestic wheat supply was high because of the record production in 2022 (10.55 million tons, according to Conab). The Brazilian production counterbalanced the decrease in the wheat availability from Argentina, an important supplier for Brazil. Production also increased in the international market.

Therefore, wheat prices were in a downward trend up to October. The low interest on closing deals and expectations of a good crop in the second semester of 2023 reinforced price drops.

Prices have started to increase in mid-October, when the harvest advanced, confirming lower numbers for both quality and quantity in this crop in Paraná and in Rio Grande do Sul – the two most important producers in Brazil. The production decrease and the firm demand from wheat mills kept prices moving up in the last two months of 2023.

Conab estimates the production in Brazil at 8.14 million tons in the 2023/24 season, downing 22.8% in relation to the previous. This scenario is a result of lower productivity (2.35 tons/hectare, 31.3% down compared to 2022). The area, in turn, increased 12.3% in relation to the crop before, to 3.46 million hectares.

Data from Cepea indicate that average wheat prices in the wholesale market dropped 28.2% in Rio Grande do Sul, 23.1% in Santa Catarina, 26.5% in Paraná and 24.3% in São Paulo from 2022 to 2023. Prices paid to producers moved down 29.5% in the same comparison.

According to data from Secex, wheat exports totaled 2.09 million tons in the first semester and only 9.5 thousand tons in the second (until November), totaling 2.1 million tons in the partial of the year. Imports amounted 3.78 million tons (up to November), below that in 2022 (5.72 million tons).

As for wheat flour and wheat bran, prices dropped in 2023, following the downward trend observed for the grain and the low interest to purchase.

Abroad, players were focused on the effects of the conflict between Russia and Ukraine and on the end of the export agreement in the Black Sea in July.

(Cepea-Brazil)