Brazil importing soy, food staples as prices soar

The surprising move is part of ongoing global food supply chain disruptions

Brazil importing soy, food staples as prices soar

Reuters – Brazil, one of the world’s largest agricultural producers, is importing food staples including soybeans due to a rise in domestic prices, President Jair Bolsonaro said in a video posted on social media.

Brazil’s turn to imports is the latest disruption to the global food supply chain as soybean prices hover around four-year highs, China prepares to buy millions of tonnes of corn and countries around the world stock up on wheat and other staples to ensure supplies during the coronavirus pandemic.

“We are importing soy now because the price is going up,” the president said in the video posted late on Oct. 28.

Bolsonaro did not mention volumes of soybean imports or specific origins. This week, there was unconfirmed market chatter that at least one U.S. soybean cargo was sold to Brazil.

“Sources said that at least one cargo of U.S. soybeans was sold to Brazil last week, set to ship from the U.S. Gulf later this year,” agribusiness consultancy StoneX said in a note to clients on Wednesday.

According to Brazilian government trade data, the country imported 542,000 tonnes of rice, mainly from Paraguay and Uruguay, in the first nine months of 2020. In a decision announced last month, Brazil exempted a quota of 400,000 tonnes of rice from outside the Mercosur trade bloc from import duties until Dec. 31.

Bolsonaro said Brazil had imported 400,000 tonnes from the United States, but government data and private sources said sales were not that large.

One U.S. broker, who asked not to be identified, said 100,000 to 120,000 tonnes of unmilled rice had been purchased for delivery to the mill in Brazil by the end of the year. The USA Rice Federation, which represents growers, millers and exporters, said total sales were around 200,000 tonnes.

“This really is a one-off… It’s in response to the crisis that they are having,” said USA Rice spokesman Michael Klein.

The U.S. Department of Agriculture Oct. 29 confirmed 25,867 tonnes of U.S. rice were shipped to Brazil in the week ended Oct. 22, more than has been shipped in any year for a decade.

Abiove, the Brazilian oilseeds crusher industry group, told Reuters it could not confirm whether U.S. soybeans had been sold to Brazil. But Abiove’s president André Nassar said some group members confirmed there are companies trying to import soybeans from the United States.

“I’m told the ends meet,” Nassar said in relation to the economics of buying soybeans from Brazil’s rival on export markets. China is Brazil’s top soybean buyer.

American soybean cargoes would be used for internal processing in Brazil, Nassar said. He cautioned, however, that importing would require approval of certain genetically modified soy traits that are authorized in the United States but not in Brazil.

Rising grains prices have added to food costs, fuelling inflation in Brazil.

On Oct. 16 Brazil suspended import tariffs on corn until March 31 of next year from non-Mercosur suppliers. It did the same for soybeans, soymeal, and soyoil valid until Jan. 15 in a bid to rein in inflation.

On Oct. 29, Brazil’s Economy Minister Paulo Guedes defended eliminating food import tariffs to control prices.

“We are evaluating what tariffs will be cut because we want to facilitate the recovery,” he said. “The price of rice is up a lot? I zero the import tariff. Soy and soyoil prices will rise? I zero the import tariff.”

Speaking later next to Bolsonaro, Brazilian Agriculture Minister Tereza Cristina Dias said that a new rice harvest would be coming online in January, and prices would then start falling.

Between January and September, soybean imports by Brazil have already totalled 528,000 tonnes, government data shows, with Mercosur countries, especially Paraguay, the main suppliers.

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