The South American wheat market is projected to register a CAGR of 4.5% during the forecast period (2020-2025). Wheat is one of the crops which are produced on a mass scale, apart from maize, in South American countries. According to FAO, South America produced about 27 million metric tons of wheat in 2018. Major producers of wheat in South America are Argentina, Brazil, Chile, Paraguay, Uruguay, and Peru. Argentina is the highest producer and exporter of wheat in South America. This local demand is likely to drive the market during the forecast period.
Key Market Trends
Argentina Dominates in Terms of Production Volume
Argentina is the largest producer of wheat in South America, with 18.51 million metric ton in 2018. According to FAO, it is the 7th largest exporter of wheat in the world. It exported around 11.72 million metric ton in 2018. Major importers of Argentinian wheat are Brazil, Algeria, Indonesia, Chile, Thailand, Peru, and Kenya. Brazil is the top importer of Argentina wheat with almost 50% of Argentina's exports, which was 5.91 million metric ton. Climatic conditions and Argentina's quality soil is the key reason behind its hefty wheat production.
Brazil is the Largest Importer of Wheat in the Region
Even though Brazil is the second-largest producer of wheat in South America with 5.5 million metric ton in 2018, the country has to depend on imports to meet domestic demand. According to ITC Trade data, Brazil is the 7th largest importer of wheat in the world, the country imported around 6.5 million metric ton in 2019. Brazil mainly imports from Argentina, being a regional exporter, the costs of importing from Argentina is much lesser than cross border imports. North American imports are also increasingly becoming popular, in 2019 around 425,038 metric ton of wheat were imported from the United States. Brazil has the potential to turn into a wheat exporting country from an importing one. Introduction of new-age technology, efficient utilization of available land area, and support of public policy will ensure the growth of wheat production in the region during the forecast period.
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