After experiencing a 6% increase in flour prices over the last 12 months, consumers will pay less for their bread in the coming months. The reasons are the increase in wheat production throughout Mercosur and the dollar’s fall, which allows the cereal to be imported at much lower prices than in recent months. To a lesser extent, the drop in prices in Chicago also helped push prices down. The excellent prices for the 2020/21 crop have provided Brazilian wheat growers with profits that were unthinkable before – around 25% in the southern region. Therefore, there has been an 8.1% increase in the planted area throughout the country, according to the estimate by CONAB (the national food supply company). National production should total 6.94 million tons, 11.3% more than in the previous cycle, with records set in Santa Catarina and Rio Grande do Sul. Other Mercosur countries are also experiencing the increased production, observes analyst Luiz Carlos Pacheco, from T&F consultancy. In Argentina, last season’s production of 17.5 million tons last cycle is forecast to increase to 19 million tons this cycle. In Paraguay, production is forecast to increase 43%, from 980,000 to 1.4 million tons. And in Uruguay, production volume is forecast to increase from 650,000 to 750,000 tons.
Sources: Valor Econômico/Datamar News