Wheat opens up in Brazil

Canada is unlikely to be a big beneficiary of the gradual opening up of the wheat trade in Brazil.

Brazil’s wheat industry group Abitrigo said the country is poised to introduce a tariff-free import quota of 750,000 tonnes per year that can be filled by any country starting in 2020, according to a Reuters report.

Brazil typically imports seven to 7.5 million tonnes of wheat annually, making it a top-five buyer of the grain.

Most of its needs are filled by neighbouring Argentina, which has tariff-free access to the Brazilian market as a member of the Mercosur trade bloc. Other exporters pay a 10 percent tariff.

Brazil agreed earlier this year to create a tariff-free quota of 750,000 tonnes for other exporters in response to pressure from the United States.

Abitrigo indicated it will be in place by the end of 2019.

Cam Dahl, president of Cereals Canada, is pleased with that development.

“I welcome absolutely every single reduction in trade barriers at this time because we’re seeing them go too often in the other direction,” he said.

However, practically it won’t amount to much additional business for Canada.

“My initial gut would be that the majority of that 750,000 tonnes is probably going to be hard red winter (wheat) coming out of the U.S.,” he said.

U.S. Wheat Associates expects to fill 80 percent of the quota.

Dahl believes the remainder will come from the Black Sea region because that is the quality of wheat Brazil is seeking.

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