Brazil May Import More U.S. Wheat in 2020

KANSAS CITY, MO – Brazil is the third-largest global importer of wheat. However, in recent years less than six percent of U.S. exports have gone to the Portuguese-speaking nation. In the past ten years, the bulk of Brazil’s wheat imports have originated from Mercosur trading partners (Argentina, Paraguay, and Uruguay) for which Brazil does not impose import duties. Argentina enjoys proximity benefits and typically supplies about 65 percent of Brazil’s total volume of imports. During periods when Argentina’s exportable wheat supplies have been limited, such as 2013/14, Brazil has removed duties on wheat from non-Mercosur countries, increasing the competitiveness of their exports. As a result, that year, the U.S. accounted for more than 50 percent of Brazil’s wheat imports. The U.S. has historically been the dominant non-Mercosur wheat exporter to Brazil and is noted for the high quality of its wheat. Last November, Brazil removed a 10-percent duty that applied to the first 750,000 metric tons of wheat imports from non-Mercosur countries. This suggests the U.S. will be increasingly more price competitive with Mercosur-origin wheat.