Brazil Expands Market for Wheat Imports
Brazil implements annual duty-free TRQ of 750,000 metric tons of wheat imports
In a November 14 press release, U.S. Trade Representative Robert Lighthizer and U.S. Secretary of Agriculture Sonny Perdue welcomed Brazil’s implementation of an annual duty-free tariff rate quota (TRQ) of 750,000 metric tons (MT) of wheat imports.
Historically, most imports have originated duty-free from the Mercosur (South American trading bloc) countries of Argentina, Paraguay, and Uruguay.
However, according to the United Nations Comtrade database, U.S. wheat made up 46% and 48% of Brazil’s imports, respectively, in 2013 and 2014 when Brazil opened the TRQ to allay temporary shortages of wheat within Mercosur.
Brazil’s implementation of the TRQ for wheat could affect U.S. wheat transportation demand both by increasing export volumes and shifting volumes across ports.
According to USDA’s Foreign Agricultural Service, the United States exported 9.5 MMT of wheat to Brazil between 2009 and 2018. Of the total wheat exported to Brazil from 2009 to 2018, 6.4 mmt (67 percent) of it occurred in 2013 and 2014.
The majority of the wheat exported to Brazil during those years originated in the western Gulf of Mexico ports of Houston-Galveston, TX and Port Arthur, TX.
Those two Texas ports and the Port of New Orleans typically handle over 90% of wheat exports to Brazil and therefore may experience a temporary increase in transportation demand.
Information provided by USDA Grain Transportation Report.