Dollar depreciation favors imports

Cepea, June 1st, 2021 – The recent depreciation of the US dollar against the Real has made wheat imports from Argentina and Paraguay more attractive to Brazilian purchasers than buying the product in the domestic market.

 

Based on data from Conab, between May 17 and 21, the import parity for the wheat from Argentina sold in Paraná was at 285.47 USD/ton. Considering the average dollar in that period, at 5.2813 BRL, the price of the product imported was 1,507.65 BRL/ton, while for the Brazilian wheat traded in the same state, prices averaged 1,643.55 BRL/ton.

 

In Rio Grande do Sul, the import parity for the wheat from Argentina was 267.44 USD/ton (1,412.45 BRL/ton) – against 1,601.32 BRL/ton on the average of RS State, according to Cepea surveys.

 

According to data from Secex (Foreign Trade Secretariat), until the third week of May, Brazil was importing 29.71 thousand tons of wheat per day, on average, against 23.36 thousand tons in May 2020, 27.19% up. The average import value in May was 271.5 USD per ton FOB origin, 21.63% higher than that in the same period last year (223.2 USD/ton).

 

In this scenario, the trading pace for wheat was slow in the Brazilian market in May, and prices faded. Many agents from mills claimed to have built inventories and that the demand for wheat flour was weak – sales of wheat bran were slightly higher, due to the high prices for corn in Brazil. As regards supply, sellers were away from the market, focused on the new crop. Although demand is lower in the domestic market, the wheat available in Brazil may not be enough until the beginning of next harvesting.

 

CROPS – According to Seab/Deral, until May 24, wheat sowing had reached 58% of the state area in Paraná, with 92% of crops in good conditions, and 8%, in average conditions. Considering the area allocated to wheat at 1.169 million hectares and productivity at 3,266 kilograms per hectare, Seab/Deral estimates wheat production in PR at 3.820 million tons in the 2020/21 season, 22% up from the previous.

 

(Cepea-Brazil)

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