Brazil's Smaller Wheat Crop Drives Up Prices, Record Imports on the Horizon

Wheat prices in Brazil have surged by 10.6% in Paraná and 8.7% in Rio Grande do Sul since July, according to data from Cepea. This increase contrasts with the typical pattern seen during harvest time, when new crop supplies would normally boost availability and lower prices.

Luiz Fernando Pacheco, director of TF Agroeconômica, noted that last year's September prices in Paraná were 5.69% below those recorded a month earlier, while in Rio Grande do Sul, the decline reached 29.86%. This year, however, prices rose 8.49% and 7.41%, respectively.

The National Supply Company (Conab) projects a wheat crop of just 5.74 million tonnes this year, which is 27% less than in the previous cycle. As a result, Brazilian Wheat Industry Association (Abitrigo) estimates imports of up to 9 million tonnes for the crop year, while Conab projects 7.05 million tonnes.

Concern over wheat quality extends beyond Brazil's borders, with Paraguay and Argentina also facing issues that could impact domestic prices in 2027. Gabriel Gavarrino, operations manager at Argentina's Grain Exchange, noted that Argentine wheat quality will be influenced by rainfall intensity over the coming months, currently favorable conditions are reported.