They say that "there is a risk that the United States will remove Argentine wheat from a significant portion of the Brazilian market"

Brazil's decision to to import from the United States 750,000 tons of wheat a year without dutyhas caused turmoil and uncertainty in the national government as well as in the production and export sectors.

At present, discussions are underway between officials of our country and Brazil, as well as with other members of Mercosur. Next week, there would be a meeting between Argentine Foreign Minister Jorge Faurie and the Secretary of the Government of Agri-Food, Luis Miguel Etchevehere. continue to badyze this situation and define the strategy, pending the knowledge of the scope of this agreement between Brazil and the United States, and determine if this becomes a competition for our country.

During the week, the Brazilian Minister of Agriculture, Tereza Cristina Dias, clarified that the duty-free wheat quota agreed upon during the Washington visit, "is for all the world exporters of wheat and not just for the United States"

Currently, the Mercosur's common external tariff for wheat is 10%which implies that our exports have this relative advantage. The duty-free import quota proposed by Brazil implies greater competition for Argentine wheat in the Brazilian market, where he dominates strong after regaining his participation in recent years.

Brazil is one of the world's leading wheat importers. The Rosario Stock Exchange, with data from the Ministry of Industry, Foreign Trade and Government Services of Brazil, pointed out that the Brazilian market in 2018 imported 6,817,138 tons of wheat, of which 5,939,491 tons were sold from our country, which shows that Argentina is by far the main source of grain supply for Brazilian mills, remaining in 2018 with a market share of 87.1% of Brazilian imports. This participation also increased compared to 2017, when it was 83.7%.

A report from the Buenos Aires Grain Exchange and the INAI Foundation (Institute for International Agricultural Negotiations) emphasized that "The United States may withdraw Argentinian wheat a large part of the Brazilian market", after the agreement sealed by presidents Donald Trump and Jair Bolsonaro.

In addition, he adds: "In a scenario of maximum participation of Argentina in imports from Brazil would decrease from 87% to 75%, baduming the United States retains its current exports and moves Argentina to 750,000 additional tons.

The report also points out that, although the form of implementation of the measure is unknown, "the adoption of a WTO quota would violate Mercosur's regulations, and Argentina could complain to the institutions of the bloc. And if our country loses this market, it could demand a form of compensation from Brazil. "

For the specialists of the Bolsa de Cereales de Buenos Aires and the INAI, "the preferential access for all the years is consolidated with this measure, without resorbing a situation of shortage Argentine offer that has three consecutive growing seasonsand far exceeds Brazil's needs. "

However, the agreement between Brazil and the United States "will have an impact on the FOB price in local ports, which need to make an extra effort to maintain their current participation in Brazil. At the time of the announcement of the measure, the market had taken note of this situation with a reduction of $ 6 per tonne in the price of Argentine wheatsaid the report.

Finally, it has been stated that on the basis of decisions such as those taken by Brazil this week ",an in-depth debate must take place on the flexibilisation of Mercosur, whose member countries require the possibility of negotiating bilateral trade agreements with extra-regional partners. "