In the midst of a global scenario of increased production of wheat, with records and great productivity in the main producing countries, Brazil faces a challenge that could compromise the national harvest, particularly in the Rio Grande do Sul, which accounts for at least 39% of the country's production. This state has suffered from excessive rainfall during the planting and crop development period.
The European Union, Russia, Canada, China and India, together, show a panorama of expansion in wheat production for the 2024/25 Harvest, as indicated in the USDA World Agricultural Production bulletin.
The European Union, for example, despite adverse weather conditions, also caused by excessive rainfall, hopes to maintain robust production, benefiting from a mild and humid winter that favored the initial development of crops. Meanwhile, in Russia, production is forecast to be above the average of the last five years, supported by favorable humidity conditions that aided seed germination.
On the other side of the globe, Canada announces an expectation of increased production due to higher yields per hectare, while China projects a record of 140 million tons, and India estimates a record production of 114 million tons.
Intense rains and their effects on the wheat harvest in Brazil
However, Brazil faces a less optimistic scenario. Excessive rainfall in Rio Grande do Sul worries producers due to the possible reduction in the quality and quantity of production due to the saturated soil. Excess water in recent weeks may have caused a leaching of essential nutrients in the soil, requiring correction and fertilization, resulting in higher production costs. Furthermore, excess moisture may compromise pre-planting preparations.
The concern in Brazil is that this phenomenon could affect not only productivity, but also influence the global wheat market. With a possible decrease in supply in Brazil, international prices may change, considering that other large producers are increasing their production.
With the higher production cost and possible lower yields, wheat producers may face a reduction in profit margin.
The greater global supply favors the import of wheat to Brazil, allowing more competitive prices for importers and processors. This can alleviate cost pressures on industries that depend on this input and, consequently, stabilize prices for the final consumer.
Therefore, while the global scenario points to an increase in wheat supply, Brazil must closely monitor the impact of the climate. This is especially true in key regions such as Rio Grande do Sul, crucial to the success of the national agricultural sector. Developments over the next few weeks will be decisive in defining losses and mitigation strategies that can be adopted by producers in Brazil.
Source: Gabriel Rodrigues | agrolink
