How Brazil can change its role in the global wheat market

Brazil is one of the main producers of agricultural commodities on the planet and is expected to be the leader in grain exports within the next five years. The country is recognized as the "breadbasket of the world", as it is estimated that the country's agricultural production feeds 800 million people every year, almost four times its population, according to studies by the Brazilian Agricultural Research Corporation (Embrapa). The highlight is the export of soy, sugar, coffee and beef and poultry, in which we are world leaders. However, we are not self-sufficient in producing a cereal present on our families' tables every day. We are talking about wheat, the second most planted cereal in the world according to the Food and Agriculture Organization of the United Nations (FAO).

In the world ranking, we are in 16th position among wheat producing countries with an estimated forecast of 6,3 million tons in the 2020/21 harvest, according to the United States Department of Agriculture (USDA) thanks to the contribution of the main producers : Rio Grande do Sul, Santa Catarina and Paraná. Together, they represent 90% of the planted area in Brazil. The remainder is distributed between the southeast, central-west and northeast of the country.

To meet domestic demand estimated at 12,7 million tons in 2021, the country annually imports more than 6 million tons, half of what is consumed, according to projections by the National Supply Company (Conab). The main suppliers are Argentina, responsible for 75,34%; the United States with 10,30%; and the other remaining 15% divided between Paraguay, Russia, Uruguay and Canada, according to 2020 data from the Brazilian Wheat Industry Association (Abitrigo).

Therefore, we will have a deficit of approximately 6,4 million tons this harvest, even with the expansion of the planted area by 8,1%, compared to the 2019/2020 harvest.

So, if several states produce wheat and there is an expectation of expanding planted areas, why do we still depend so much on imports? There are several factors: the low competitiveness of cereal prices in Brazil discourages producers from expanding their planted area; the Mercosur agreements with low taxes on the import of Argentine wheat and insecurity due to climate variations that bring frosts in the south and a greater risk of disease incidence, as well as drought in the center-west that makes it difficult to expand areas in the region.

However, there is good news on the horizon. The wheat production scenario in the country has been changing and is becoming a competitive market. With the rise in the dollar generated by the global economic scenario resulting from the Covid-19 pandemic, producers in Rio Grande do Sul, paying attention to the market, expanded their areas dedicated to planting wheat, a movement followed by producers in the cerrado.

On another front, producers are expanding cultivation areas in the country's hottest regions, which, according to Embrapa research, have the potential to produce more than 2 million hectares. This was possible due to intense breeding work for cultivars adapted to these regions carried out by Embrapa and private entities. Wheat is another alternative in the region's crop rotation systems, which can occupy areas normally uncovered during the winter period, also bringing benefits in terms of increasing organic matter in the soil and reducing the carbon footprint. In this model, the crop is integrated into producers' planting plans in mature, arable areas. The average cereal productivity in the country is a little more than 2,5 tons per hectare (ton/ha). In the Northeast, there are already areas that have reached productivity of up to 6 tons/ha. The region has the potential to produce up to 2 million hectares, according to studies by Embrapa.

Another factor that makes us more dependent on imports is the quality of the flour produced here. In general, Brazilian cereal has low quality for baking, due to the low concentration of gluten and proteins. Only 30% of the national cereal has baking quality, according to Abitrigo. Due to the drier climate during the grain's maturation period, the cerrado regions still have the capacity to produce high quality wheat, compared to Canadian cereal, considered the best in the world.

In addition to Embrapa, biotechnology companies are bringing innovations to help expand national wheat production in areas that have not yet been considered possible due to soil and climate. With the arrival of these technologies, we will be able to have high quality wheat production. The confluence of these factors will reduce dependence on imports.

Sun, soil, new cultivars and committed growers - we already have it all. Now, let's work together to expand national production and also be protagonists on the global stage with this grain, living up to our role as the world's breadbasket and being responsible for feeding a large part of the world's population.

Isadora Jaeger, agronomic specialist at Agrobravo