Canadian wheat exports stand to gain from Brazil’s move to triple non-hard wheat tariffs against the United States, a Canadian Wheat Board official said last week.
Last Monday the Brazilian government published a list of U. S. goods subject to import tariffs that will go into effect in 30 days in retaliation to U. S. cotton subsidies. Tariffs on U. S. non-hard wheat would rise to 30 per cent from 10 per cent.
That leaves Canada with an export opportunity, said Bruce Burnett, director of weather and market analysis at the Canadian Wheat Board.
“Certainly in a year like this year when the wheat market is very competitive, it would be nice to have an advantage into that marketplace,” Burnett said in an interview with Reuters.
How much of an opportunity Canada has depends on when Brazil’s higher wheat tariff takes effect, Burnett said. Brazil’s government said there is still time for a negotiated solution with the U. S.
Brazil’s offshore wheat demand fluctuates widely from year to year, depending on the size of its domestic crop and that of other South American countries such as Argentina that are part of the regional trade agreement Mercosur.
Big South American crops of corn and soybeans are expected to be harvested, but Argentina’s wheat crop is small, Burnett said.
Brazilian mills are concerned about the small amount of wheat available, which will keep Argentine wheat prices high, said a wheat trader in Sao Paulo.
“They make have to accelerate their purchases,” the trader said. “It will be necessary to turn to wheat from other origins.”
Brazil is most likely to import wheat from Poland, Russia and Canada, the trader said.
Brazilian Agriculture Minister Reinhold Stephanes said options for wheat imports include Canada, Russia and the European Union.
In 2008/09, Brazil imported just 143,000 tonnes from Canada. The previous year, it imported 477,000 tonnes, making it the board’s No. 11 wheat export market in 2007/08 and its top South American market.
Canada’s wheat exports to Brazil may rise to between 350,000-400,000 tonnes in the current 2009/10 crop year, said Lawrence Yakielashek, general manager and vice-president of Alfred C. Toepfer (Canada) Ltd.
“It definitely highlights that you’ve taken one (wheat country) origin out of play but I don’t think it’s going to bring a stampede of new business,” he said.
Comments