Argentina Wheat Export: Indonesia Ranks Second


Apr 21, 2023 | Agricultural Markets News

Reading time: 2 minutes

The Latin American region of Mexico, Central America, and South America imports nearly one billion bushels of Wheat annually, with 368 million bushels coming from the United States. Imports from the U.S. are expected to increase to more than 500 million bushels by 2050. Fostering relationships with the Latin American expanding market has been a long-term priority of U.S. Wheat Associates (USW), the export market development organization for the U.S. Wheat industry. USW holds a Latin American Buyers Conference every other year.
USW President Vince Peterson illustrated the changing dynamics of global Wheat trade and increased competitiveness from Russia and other non-traditional importers into the region. Mark Fowler, Vice President of Overseas Operations, followed up by highlighting the need to provide increased value for our U.S. Wheat customers through additional technical service.
“U.S. Wheat Associates continues, with the variety of quality provided by the six classes of U.S. Wheat available, to remain the best choice for our customers in Latin America,” said Fowler. “As the market becomes more competitive and our customers strive to differentiate their products to their customers, our ability to provide the technical service and product development assistance becomes even more vital to our success.”
“Meeting with international Wheat buyers in Latin America is important because we export half of the Wheat that we grow every year. It is important for farmers to have those markets,” Harries said. “We try to continue fostering relationships with the buyers. The Latin American region imports 25 million metric tons (918.6 million bushels) of Wheat annually, which is expected to increase to 35 million metric tons (1.286 billion bushels) by 2050. The U.S. enjoys 40 percent of that market share.”
Agricultural giant Brazil is due to increase its Wheat crop coverage by between three and 11 percent this year, according to Embrapa Wheat, a state-run research unit affiliated with the Brazilian agriculture ministry. Record prices, surging demand, and the “expectation of favorable weather strengthen the projection of an increase in the planted area” from 2.7 million hectares in 2021 (6.7 million acres) to a little over three million in 2022, said Embrapa Wheat.
But the country of 213 million people is already unable to meet domestic demand — estimated at 12.7 million tons a year, and rising. Internal logistical and transport costs have pushed many farmers, particularly in the south, to favor exporting, thus increasing the need to import. Brazil is the world’s eighth largest Wheat importer, most of which (87 percent) comes from Argentina.

Argentina Wheat Export: Indonesia Ranks Second

Water Reserves Challenge Argentinian Wheat

Argentina, home to 45 million people, is also traditionally a significant Wheat producer — but current climatic conditions are unfavorable, meaning it is unlikely to help fill the global void. “We expect about an eight percent drop in the land area planted with Wheat,” said Tomas Rodriguez Zurro, an analyst at the Rosario grains exchange.
That amounts to a drop from 6.8 million to 6.3 million hectares, primarily due to a drought affecting the country, Rodriguez Zurro explained. “In general, we plant Wheat to then plant soybean, but the water reserves are very low, so the producers don’t want to risk planting Wheat in case it reduces the humidity reserves even more” for subsequent plantings, said Rodriguez Zurro. On top of that, farmers say they will use less fertilizer due to soaring prices — another factor limiting production, the analyst said.
According to AgFlow data, Brazil exported 649,569 tons of Wheat in Jan-Feb 2023, while Argentina shipped 554,891 tons. Argentina’s biggest export market was Brazil (308,791 tons), followed by Indonesia (93,000 tons), Colombia (60,000 tons), and Peru (51,900 tons).

Other sources: MORNING

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