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Brazil Wheat Exports Rise, While an Urgency to Get Ukrainian Farmers “Back in the Fields” Remains

Financial Times writers Michael Pooler, Bryan Harris and Lucinda Elliott reported yesterday that, “Alongside the sugarcane and soyabeans that sprout from his fields in the interior of São Paulo state, this year José Odilon De Lima Neto plans on sowing a different crop for the first time.

“‘There may be an investment opportunity in wheat due to complications for summer planting in Ukraine and Russia,’ said the farmer based near the city of Ribeirão Preto.

International prices for the cereal have surged since Moscow invaded its neighbour, reflecting worries that the warring nations — which together account for about 30 per cent of all wheat trade — will struggle to deliver to the dozens of countries that rely on them for imports.”

“Grain: World Markets and Trade.” USDA- Foreign Agricultural Service (April 8, 2022).

The FT writers noted that, “Many agricultural enterprises in the region are in line for a windfall from higher commodity prices, leading some such as De Lima Neto to expand output or even switch into new areas.

But at the same time, elevated costs or looming scarcity of crucial inputs — such as fuel, fertilisers and animal feed — risk dragging on their ability to help guarantee global food security.

Pooler, Harris and Elliott pointed out that, “Although Brazil’s largely tropical climates limit wheat cultivation, it has exported more of the grain this year than in the whole of 2021. With advances in crop technology, experts believe the country — a traditional net importer of wheat — has the potential to become self-sufficient and even a net seller in the future.”

“Brazil, a traditional net importer of wheat, has taken advantage of strong global import demand, tightening global supplies, and elevated international prices to expand its exports. 2021/22 exports, which are adjusted up 800,000 tons this month to 2.5 million, have nearly tripled since last year’s total and are just under its 2010/11 record. Brazil, which typically ramps up exports in December and tapers off in April, has exported 2.1 million tons so far this year.”  (“Grain: World Markets and Trade.” USDA- Foreign Agricultural Service (April 8, 2022)).

The FT article added that, “Another challenge is that this highly productive corner of the planet is still emerging from a period of severe drought that has damped growth in agricultural output and inflicted financial harm.

“For Brazil in particular one concern is fertilisers, which became more expensive before the war. The country imports 85 per cent of those chemical nutrients that it consumes, with about one-quarter from Russia.

“‘For the planting season in September, it’s going to depend a lot on the availability of fertilisers. A lack could lead to a drop in productivity,’ said [Caio Carvalho, president of the Brazilian Association of Agribusiness (Abag)]. ‘I’m very worried.'”

Meanwhile, Reuters writer Pavel Polityuk reported late last week that,

Ukraine’s state-owned railway company has temporarily restricted the transportation of some agricultural goods through border crossings to Poland and Romania, consultancy APK-Inform said on Saturday.

“It gave no reason for the restrictions.

“Ukraine, a major agricultural producer, used to export most of its goods through seaports but since Russia’s invasion has been forced to export by train via its western border.”

And Kelsey Micklas reported recently at CBS News Online that, “So far, the United Nations’ World Food Programme has been able to reach over 1 million people inside Ukraine, providing them with ready-to-eat food, bread and cash assistance.

“But [World Food Programme Executive Director David Beasley] said the war has caused a dramatic increase in the need for food aid around the world, and Ukraine — a significant producer and exporter of agricultural products such as grain, sunflower seeds and corn — could fall behind on its output because of the war. In 2021, the country exported over $27 billion in agricultural products.

“‘This is a very serious problem if we don’t get the farmers back in the fields, not just a few, but all the farmers back into the fields. So they can plant, they can put fertilizer out, they can harvest,’ Beasley said on [Face the Nation].”

“He said it is equally important to reopen ports.

“‘The Black Sea is shut down right now,’ Beasley said. ‘That’s the basis and the way by which 400 million people get their food from Ukraine right now. So that’s got to be opened up.'”

Keith Good Photo

Keith Good is the social media manager for the farmdoc project at the University of Illinois. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily FarmPolicy.com News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.

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