Brazil surpasses its own records for wheat production

According to CONAB, wheat production would reach 9 million tons, the highest record for the largest Latin American economy. The increased cultivated area and higher yields are the bases for this new production increase.

Year after year, the evolution of Brazilian agricultural production shows the enormous capacity of this country to surpass its own results. Wheat production is increasing year after year.

Read also: Have look at our coverage on Brazilian wheat

This allows it to position itself as one of the world’s food supply’s main players. However, in the case of wheat, demand exceeds Brazilian supply, which is why it imports grain mainly from Argentina.

According to the Rosario Stock Exchange, Brazilian production is expected to increase sharply in the 2022/23 cycle due to a larger area planted for winter crops and rising yields

Based on the first of these factors, wheat acreage in Brazil in the coming marketing year is expected to be 6.6% higher than last year. This is the highest level since the 1990/91 season when 3.3 million ha were allocated.

According to the Companhia Nacional de Abastecimento (CONAB), wheat acreage has increased over the past three years. Acreage is increasing from about 2 million ha in the 2019/20 crop to almost 2.9 million ha in the 2022/23 crop, an increase of almost 43.3% between these campaigns.

The second explanatory factor is yields. The new 2022/23 crop is expected to set a new record for Brazilian wheat production. In this sense, 30.9 qq/ha would be reached in this cycle, exceeding the yield of the previous marketing period by 2%.

CONSUMPTION

Despite this strong increase in production, the total supply of Brazilian wheat would barely exceed the last cycle by 300,000 tons due to the decrease in stocks of the grain. In this sense, the 2021/22 season will “bequeath” stocks of 480,300 tons to its successor.

On the other hand, this amount of stocks would hardly be enough to cover the national consumption for 14 days, so the arrival of the harvest and imports will play an essential role in supplying the Brazilian wheat market.

It should also be noted that initial stocks in Brazil have decreased, as they now represent less than 5% of Brazilian wheat consumption.

Despite the strong increase in production, it is important to highlight the fundamental role of imports. According to Brazilian agency estimates, these will continue to increase in the 2022/23 season, supporting market supply.

In this sense, wheat imports are estimated at 6.5 million tons, 8.3% more than in the last cycle.