M. Dias Branco, Brazil's third-largest milling group, said on Wednesday that it will buy slightly more wheat from outside Mercosur than last year. Canada could be one of the origins, said investments vice-president for Dias Branco, Geraldo Luciano, adding that the company is well supplied to go through the inter-harvest period in Argentina (roughly May-December), its main supplier.
"There isn't any supply problem but a price problem. So we will keep buying from the two countries from where we've always bought, Argentina and Canada," Luciano said in a telephone interview. International wheat prices have been close to the highest level in 11 years.
"Maybe this year we will buy a little more from outside Mercosur, but it will not be that relevant." Brazil will intensify the search for alternative sources in the second half of the year because the lower local production in 2006 and availability in Argentina, which supplies Brazil with 95 percent of wheat imports.
According to market sources, Dias Branco was one of the companies that bought Canadian wheat in June, with at least 25,000 tonnes from 80,000 tonnes worth of business which was officially confirmed by the Canadian Wheat Board. Brazil had not bought wheat from Canada for more than a year. Purchases from outside Mercosur are normally more expensive to Brazilian companies because Argentine cereals are duty free.
Comments
Comments are closed for this article.