[ad_1]
Cepea, January 15th, 2024 – Production estimates for the 2023/24 season for both Brazil and the world are lower compared to the previous crop. Brazil may be the 16th biggest wheat producer in the 2023/24 season and the 10th largest exporter. The global wheat supply in the 2023/24 crop may reduce after four years of increases in a row.
In Brazil, after major price rises in 2022, the area planted with wheat increased in 2023. However, due to weather issues, productivity was lower, reducing production significantly. Conab indicates that production in Brazil may total 8.14 million tons in 2023/24, downing 22.8% compared to the record registered in the crop before (10.55 million tons). Still, it is the second biggest production in history.
2024 is starting with one of the biggest wheat volumes in Brazil. However, the quality of harvested grains was severely affected, which may encourage an increase of imports, to cover the wheat flour production for the domestic market. Conab projects imports of 6 million tons from August/23 to July/24, almost 33% more compared to that in the season before. Exports, in turn, are expected to drop to 2 million tons (from August/23 to July/24), for a decrease of 24.7% in relation to the previous crop.
This context may boost trades with Argentina, which is currently the major origin of the wheat imported by Brazil.
The projection of an increase of imports leads agents to focus on the exchange rate. According to the Focus Survey, released by Brazil’s Central Bank, dollar quotations may increase in 2024. Secex data indicate that, in 2023 (up to November), the average import price (Free on Board) was BRL 1,577.29 per ton, against BRL 1,872.67 per ton in 2022.
As for the next season, the wheat production in Brazil is expected to increase in 2024, if producers keep the area, which rose in 2023. As a result, if the weather is favorable for the crop, the national production may surpass the record in 2022. In case this scenario is confirmed, imports may reduce in the second semester.
(Cepea-Brazil)
[ad_2]
Fonte: Cepea