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Country Briefs

  Brazil

Reference Date: 10-November-2016

HIGHLIGHTS

  1. Cereal production in 2016 estimated at lowest level in five years

  2. Cereal imports for 2016 marketing year forecast at high level

  3. Maize and rice prices seasonally increased in October; wheat prices declined with the harvest

Cereal production in 2016 estimated at lowest level in five years

Total cereal production in 2016 is estimated close to 83 million tonnes, its lowest level in five years. The decline in cereal output mainly reflects a sharp reduction in 2016 aggregate maize production (first and second “safrinha” seasons) of some 22 million tonnes as a result of lower yields and crop losses due to the severe dry weather associated with the El Niño event. Rice production has also been estimated sharply down from last year’s level as reduced plantings due to low prices at the beginning of the season, combined with El Niño-induced drought conditions, resulted in a reduction in output of 15 percent from 2015. By contrast, wheat output is estimated at 6.2 million tonnes, up 13 percent from last year. However, concerns about the low quality of the wheat crop remain.

Planting of the first season 2017 maize crop is well advanced. Early official estimates point to a significant increase in the area planted over last year’s reduced level supported by high local prices and favourable weather conditions.

Cereal imports for 2016/17 marketing year forecast at high level

Cereal imports in the 2016/17 marketing year are anticipated close to 9.5 million tonnes, the second highest level in a decade. This mainly reflects an expected increase in maize imports during the marketing year (March/February), which are forecast at a record high of 2 million tonnes. A tighter supply outlook, following high exports earlier in the year, the reduction in this year’s harvest and strong demand from the feed sector, have led the Government to authorize maize imports from outside the MERCOSUR at a zero tariff rate.

Maize and rice prices seasonally increased in October; wheat prices declined with the harvest

Prices of yellow maize moderately increased in October mostly reflecting seasonal trends that were somewhat moderated by the recent appreciation of the local currency. Tight supplies from this year’s reduced harvest, kept yellow maize prices some 30 percent above their level from a year earlier. Rice prices also increased moderately in October reflecting seasonal trends and were 29 percent above their level from a year earlier due to this year’s reduced crop and high demand. By contrast, prices of wheat and wheat flour declined as product from the recent harvest has started to supply the markets.