The Japan Times - Why South America's breadbasket isn't the answer to global wheat crisis

EUR -
AED 3.815496
AFN 76.871486
ALL 98.71287
AMD 415.53388
ANG 1.872501
AOA 949.991286
ARS 1094.775469
AUD 1.652997
AWG 1.866721
AZN 1.763868
BAM 1.961047
BBD 2.097904
BDT 126.713327
BGN 1.957582
BHD 0.391385
BIF 3038.518174
BMD 1.03881
BND 1.406123
BOB 7.179868
BRL 5.987595
BSD 1.039025
BTN 90.966596
BWP 14.441964
BYN 3.40028
BYR 20360.668787
BZD 2.087075
CAD 1.486126
CDF 2960.60705
CHF 0.939884
CLF 0.026062
CLP 1000.114251
CNY 7.571992
CNH 7.569842
COP 4299.892769
CRC 528.758109
CUC 1.03881
CUP 27.528455
CVE 110.892369
CZK 25.086832
DJF 184.61711
DKK 7.461692
DOP 64.562476
DZD 140.540892
EGP 52.252537
ERN 15.582144
ETB 131.149549
FJD 2.399702
FKP 0.85555
GBP 0.835172
GEL 2.903481
GGP 0.85555
GHS 15.997349
GIP 0.85555
GMD 74.794164
GNF 8991.936443
GTQ 8.032454
GYD 217.387377
HKD 8.088665
HNL 26.666319
HRK 7.665946
HTG 135.906929
HUF 404.741528
IDR 16971.188779
ILS 3.692023
IMP 0.85555
INR 90.978012
IQD 1360.840618
IRR 43720.908258
ISK 146.804559
JEP 0.85555
JMD 164.285127
JOD 0.736935
JPY 157.386941
KES 134.006455
KGS 90.843692
KHR 4173.42342
KMF 493.017148
KPW 934.928784
KRW 1502.414803
KWD 0.320515
KYD 0.865896
KZT 533.810933
LAK 22562.945627
LBP 93107.707477
LKR 309.880666
LRD 204.931161
LSL 19.165681
LTL 3.067335
LVL 0.628366
LYD 5.100492
MAD 10.395885
MDL 19.446814
MGA 4882.405587
MKD 61.522609
MMK 3374.013163
MNT 3529.875241
MOP 8.332498
MRU 41.604556
MUR 48.48123
MVR 15.997825
MWK 1804.41218
MXN 21.256725
MYR 4.59678
MZN 66.380067
NAD 19.166119
NGN 1556.874082
NIO 38.176002
NOK 11.642262
NPR 145.54836
NZD 1.830159
OMR 0.399952
PAB 1.039075
PEN 3.856581
PGK 4.160173
PHP 60.302379
PKR 289.928693
PLN 4.190358
PYG 8179.729721
QAR 3.782328
RON 4.976212
RSD 117.081577
RUB 100.503929
RWF 1455.372294
SAR 3.895974
SBD 8.770853
SCR 14.889565
SDG 624.324959
SEK 11.313935
SGD 1.403078
SHP 0.85555
SLE 23.793905
SLL 21783.318495
SOS 593.682616
SRD 36.468439
STD 21501.262034
SVC 9.091721
SYP 13506.60282
SZL 19.166318
THB 35.113324
TJS 11.341576
TMT 3.635834
TND 3.320559
TOP 2.432997
TRY 37.281422
TTD 7.055286
TWD 34.080236
TZS 2660.161877
UAH 43.079738
UGX 3818.382581
USD 1.03881
UYU 45.232993
UZS 13494.136678
VES 62.39778
VND 26250.7194
VUV 123.329565
WST 2.909526
XAF 657.745479
XAG 0.032211
XAU 0.000364
XCD 2.807435
XDR 0.796867
XOF 654.978376
XPF 119.331742
YER 258.663235
ZAR 19.137788
ZMK 9350.542162
ZMW 29.172728
ZWL 334.496278
  • RBGPF

    -0.7000

    65.3

    -1.07%

  • RYCEF

    0.0300

    7.53

    +0.4%

  • CMSC

    -0.0600

    23.44

    -0.26%

  • NGG

    -1.0000

    61.67

    -1.62%

  • RELX

    -0.3700

    50.4

    -0.73%

  • VOD

    0.1700

    8.44

    +2.01%

  • RIO

    0.8200

    62.19

    +1.32%

  • GSK

    -1.3200

    36.38

    -3.63%

  • BTI

    0.5200

    41.62

    +1.25%

  • AZN

    1.4250

    72.36

    +1.97%

  • SCS

    0.0200

    11.58

    +0.17%

  • BCC

    0.3600

    125.11

    +0.29%

  • JRI

    0.0000

    12.83

    0%

  • CMSD

    0.0100

    23.83

    +0.04%

  • BCE

    -1.3800

    23.52

    -5.87%

  • BP

    0.2900

    31.96

    +0.91%

Why South America's breadbasket isn't the answer to global wheat crisis
Why South America's breadbasket isn't the answer to global wheat crisis / Photo: NORBERTO DUARTE - AFP/File

Why South America's breadbasket isn't the answer to global wheat crisis

As the world faces a growing food crisis provoked by Russia's invasion of Ukraine, many have looked to South America's "breadbasket" -- major wheat producers Brazil and Argentina, along with Uruguay and Paraguay -- as a possible solution.

Text size:

But experts and analysts say a variety of factors -- climate, cost, domestic needs -- make such a solution highly unlikely.

Russia and Ukraine alone produce 30 percent of the world's wheat supply.

Moscow's military offensive in Ukraine and subsequent sanctions on Russia have disrupted supplies of fertilizer, wheat and other commodities from both countries, pushing up prices for food and fuel, especially in developing nations.

A suspension of India's exports have further exacerbated the problem.

Here's a look at the major wheat producing countries in South America, and how they might, or might not, be able to help alleviate the crisis:

- Brazil: higher yield, but big needs at home -

Agricultural giant Brazil is due to increase its wheat crop coverage by between three and 11 percent this year, according to Embrapa Wheat, a state-run research unit affiliated with the Brazilian agriculture ministry.

Record prices, surging demand and the "expectation of favorable weather, strengthen the projection of an increase in the planted area" from 2.7 million hectares in 2021 (6.7 million acres) to a little over three million in 2022, said Embrapa Wheat.

But the country of 213 million people is already unable to meet domestic demand -- estimated at 12.7 million tons a year, and rising.

Internal logistical and transport costs have pushed many farmers, particularly in the south, to favor exporting, thus ramping up the need to import.

Brazil is actually the world's eighth largest importer of wheat, most of which (87 percent) comes from Argentina.

- Argentina: lack of water reserves -

Argentina, home to 45 million people, is also traditionally a major wheat producer -- but current climatic conditions are unfavorable, meaning it is unlikely to help fill the global void.

"We expect about an eight percent drop in the land area planted with wheat," Tomas Rodriguez Zurro, an analyst at the Rosario grains exchange, told AFP.

That amounts to a drop from 6.8 million to 6.3 million hectares, due mostly to a drought affecting the country, Rodriguez Zurro explained.

"In general, we plant wheat to then plant soybean, but the water reserves are very low, so the producers don't want to risk planting wheat in case it reduces the humidity reserves even more" for subsequent plantings, said Rodriguez Zurro.

On top of that, farmers say they will use less fertilizer due to soaring prices -- another factor limiting production, the analyst said.

Russia is the world's largest exporter of fertilizers with more than 12 percent of the global market, but its sales have been virtually paralyzed by sanctions.

- Paraguay and Uruguay: small global impact -

Both Paraguay, a country of 7.5 million, and Uruguay (population: 3.5 million) enjoy good wheat yields -- but they have a much smaller global impact and neither expects to increase production.

"Wheat production is expensive, very expensive," said a source at Uruguay's agriculture ministry.

Farmers there expect a yield "similar to last year, or slightly higher," the source said -- a total that should satisfy domestic demand and allow exports to remain at roughly one million tons a year.

In Paraguay, production should also remain stable, according to Hector Cristaldo, president of Paraguay's farmers' union, but he added: "Our volumes are not significant on the world stage."

Paraguay consumes 700,000 tons and exports as much again, almost exclusively to Brazil.

In mid-May, when India banned exports, wheat reached a record price of 438.25 euros ($456.68) per ton in European trading.

H.Hayashi--JT