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Brazil wheat making strides in global markets amid Russia-Ukraine conflict

Brazil is poised to register record wheat shipments for January as local suppliers continue to fill the void left by major exporters Russia and Ukraine because of the ongoing war, industry sources told Reuters.

The combination of a bumper harvest and production hiccups in Argentina due to a drought also bolstered Brazilian exporters, particularly in Rio Grande do Sul, the country’s biggest wheat producer, they said.

Based on shipping schedules, the National Association of Cereal Exporters (Anec) projected wheat exports at 803,800 tonnes for January.

If confirmed, the volume will represent a new historic high for the month, compared to the previous record of 695,900 tonnes registered in January 2022, according to Anec data.

“Brazil is a big producer and exporter of grains. As you earn credibility from the soybean trade, you begin to expand to other products,” Anec Director-General Sergio Mendes told Reuters.

According to Mendes, grain importers see Brazil as a reliable supplier, and this favors exporters.

Indonesia, Saudi Arabia and Sudan buy around 50% of Brazilian wheat exports. Vietnam is also a prominent buyer, Mendes noted.

“The maintenance of shipments to these countries with whom we maintain good commercial relations leads to the belief that things are progressing,” Mendes said about Brazil’s inroads in global markets.

StoneX, a consultancy, projects Brazilian shipments of 3 million tonnes of wheat for the 2022/23 season, from August 2022 to July this year, stable from the previous cycle’s record.

Brazil’s growing wheat exports, however, still pale in comparison to Ukraine’s 13 million tonne export estimated by United States Department of Agriculture for the 2022/2023 season.

Over the entire 2022/23 July-June marketing season, world top exporter Russia faced complications to sell wheat because of Western sanctions.

But despite Russia’s involvement in the war, its wheat export forecast for 2022/2023 is estimated at 44.1 million tonnes, representing a 10 million tonne rise from the previous cycle, according to SovEcon agriculture consultancy.

Source: Reuters

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