Brazil's agriculture ministry seeks duty-free quota to import wheat


Brazil's agriculture ministry is seeking approval to import 750,000 tonnes of wheat duty-free, its press office said on Wednesday.

The request follows a reduction of planted area this year and problems with production in the southern states of the country, where above-average rains and frosts damaged the fields.

Brazil is one of the world's largest wheat importers and normally buys the cereal from its Mercosur trade block partner Argentina, which already enjoys duty-free treatment as part of the block's rules. Suppliers outside Mercosur face an import tax of 10 percent.

The ministry said the duty-free quota, if approved, would allow wheat from all origins, including the United States, which sells some wheat to Brazil at times when it can compete with Argentina on price.

The quota would be welcomed by other suppliers, with Russia in the forefront.

One of the world's largest wheat exporters, Russia usually supplies the Middle East and North Africa, but it is harvesting a record grain crop this year and has repeatedly said that it would like to start shipping wheat to Brazil as it is searching for new markets.

Brazil's Agriculture Minister Blairo Maggi met his Russian counterpart in Moscow in early October, and wheat trade was one of the topics discussed.

Brazil's planted area with wheat fell almost 10 percent this year as farmers chose other crops that were giving them better returns.

Above-average rains and frosts in the South of the country, where most wheat is cultivated, damaged the already smaller crop. The country is expected to produce only 4.88 million tonnes, 27.4 percent less than last year. Local consumption is seen by the government at 11.3 million tonnes.

The request could be evaluated by Brazil's top foreign trade chamber Camex early in November. The chamber is composed of representatives from several ministries and is in charge of deciding on changes in the country's foreign trade policies.


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