The effects of the invasion of Ukraine by Russia begin to reach the Brazilian consumer through the bagel. Wheat, which had international price rises during the period of tensions between the two countries, is the cereal with the greatest readjustments in the foreign market, after the Russian invasion.
The effects in Brazil, one of the main wheat importers in the world, are immediate. The direct Russian participation in Brazilian wheat imports is of little importance, but Russia’s influence on the formation of international prices is great.
Last year, the Russians were responsible for only 0.5% of the cereal imported by Brazilians, exporting 28 thousand tons.
The Russians gained access to the domestic market in 2018, when they placed 26,000 tonnes in the country. In 2020, there were 238 thousand tons, the highest volume so far and 4% of Brazilian purchases.
The importance of Russia in the wheat sector — it is the main world exporter —, however, has already caused cereal prices to rise by 40%, in dollars, in the last 30 days.
The first contract closed at US$ 10.585 per bushel (27.2 kg) on ​​the Chicago Stock Exchange on Wednesday (2), with the cereal reaching a high of US$ 11.32 during the trading session.
Wheat is close to reaching its all-time high on the Chicago Stock Exchange, when it reached US$13.345 per bushel. This peak occurred in 2008, the year of the financial bubble.
The international market is agitated due to the current uncertainties in the cereal supply. In addition to Russia, Ukraine is also important in the international market.
Russian exports are expected to reach 35.5 million tonnes in the 2021/22 harvest, and Ukrainian exports 24 million. Together, the two countries have 29% of the international market.
The wheat purchased by Brazil comes basically from Mercosur. Argentina supplied 5.43 million tons in 2021; Paraguay, 334 thousand; and Uruguay, 308 thousand. Last year’s total imports totaled 6.22 million.
The increase in prices in the international market is reflected in domestic prices. The ton of wheat already reaches R$ 1,722 in Paraná, a value that accumulates a high of 80% in two years.
The prices of bread rolls and wheat flour, which had been falling at the end of 2021, rose again. In the second quadrissemana of February (last 30 days until the middle of the month), French bread had a readjustment of 1.2%, and flour, 1.4%, percentages well above those of December.
This resumption of prices for wheat flour and bread rolls occurs after an accumulated increase of 23% and 19%, respectively, in the last two years for these products, according to Fipe (Fundação Instituto de Pesquisas Econômicas).
The increase in flour removes margins from industries, which have no more space for transfers. Already the increase in bread weighs on the consumer’s budget. Of every R$100 spent by São Paulo residents, R$1.4 is spent on this food, according to Fipe.
These wheat derivatives, which are already starting to rise in prices, will in a few weeks incorporate new readjustments from the foreign market.
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