Trade sounds alarm as Brazil’s Parana wheat areas rated 8% bad
Updated crop data from Brazil’s main wheat producing region has raised trade concerns over the potential health of Brazil’s...
Updated crop data from Brazil’s main wheat producing region has raised trade concerns over the potential health of Brazil’s upcoming wheat crop as cold, frosty conditions spread across the region.
Authorities in Parana, the biggest wheat producing state in Brazil, are starting to assess the impact of the recent frosts on crops with the state’s agricultural entity Deral rating 8% of the current production bad and 28% rated average in its regular crop condition update.
While 64% is still rated as good, last week’s data showed areas rated bad and average were 2% and 8%, respectively, with the latest frosts bringing a marked deterioration in quality.
“When the first wave of frost hit at the end of June, the wheat was not at a sensitive stage,” Victor Martins of Hedgepoint Global told Agricensus.
“But when the third wave hit crops in late july, we had over 30% of the wheat crops already emerged so the damage now is real and yields can be hindered,” Martins said.
At the same point of last year, 89% of the area was rated good, 2% bad, and 9% average.
“That means all areas that were susceptible were affected by the cold,” Deral’s Coordinator of Statistics Division, Carlos Hugo Godinho said.
Deral’s latest estimate is for a harvest of 3.7 million tonnes, a 22% increase from last year and the largest harvest since 2017.
“The intensity of the loss is hard to know until September, as we do not have a significative area, only 2%, in fruition. Until we have 40% we won’t know the extent of the damage,” Godinho said, equating the potential damage to be on par with 2019, when drought impacted the state’s production.
In 2019, production fell 24% in comparison to the year prior, to 2.14 million mt in a dynamic that raised the possibilty of potential increase in import supply.
“Wheat yields in Parana will be reduced and the quaility will be affected. The need for imported wheat now will instensify, but the issue is whether enough Paraguay and Argentina wheat supplies will be around,” Martins said, with both countries also facing a potential loss of production amid similar conditions.
Brazil is expected to produce around 6.9 million mt of wheat in the 2021/22 marketing year, USDA data showed, with imports currently expected to top 7 million mt.