Miller Magazine Issue 109 / January 2019

26 NEWS MILLER / JANUARY 2019 Brazil could open up 43 million hectares of new agricultural land Brazil, which accounts for some 7 percent of the wor- ld’s grain output, has potential to expand arable land for agriculture on an estimated 43 million hectares in the vast central Cerrado region, Reuters reported.Aurélio Pavinato, chief executive of Brazilian grain producer SLC Agrícola SA, told an industry event that such an area could be used to increase grains and sugarcane output in the South Ameri- can nation. Brazil is expected to account for about 18 per- cent of the global grains exports in the 2018/19 season. The country is poised to produce 235 million tonnes of grains in the present cycle, with grain exports forecast to reach 107 million tonnes, Pavinato said, citing USDA data. According to the executive, farmers in the United States plant around 100 million hectares with grains, while Bra- zil’s total is around 46 million hectares. “Expanding agricultural production would demand he- avy investments,” he said, without elaborating on the ac- tual costs. Brazil has about 180 million hectares of pasture land, and parts of it could be converted into arable land, which would add to the land area given over to grain pro- duction without either harming the environment or using conservation areas, he said. “Brazil could free up to 70 million hectares of pasture land for agriculture in the spa- ce of between 30 or 40 years,” Pavinato said. Indonesia’s wheat flour imports decline by 40 percent Indonesia Grain and Feed Update of the U.S. Depart- ment of Agriculture (USDA) provided significant data on one of the world’s biggest wheat importers. Based on recent trade data, 2017/18 wheat imports are es- timated lower at 10.516 million tons compared to the previous estimate of 12.0 million tons, USDA said. The reduction is primarily due to a weakening rupiah hinde- ring imports . Wheat imports for 2018/19 are forecast to remain at 10.5 million tons. According to report, the wheat milling industry is esti- mated to have grown by five percent in 2017/18. Relati- vely lower prices for wheat flour and wheat flour-based food compared to rice are shifting consumption away from the Indonesian staple. The Indonesian Flour Mills Association (APTINDO) further projects that the total installed capacity of Indonesian flour mills will reach ap- proximately 14.2 million tons by 2024/25. According to the Global Trade Atlas, in 2017/18, wheat flour imports declined by 40 percent to 50,507 tons of wheat equi- valent, compared to 84,377 tons of wheat equivalent imported in 2016/17. The decline is mainly due to the continued weakness of the rupiah against the U.S. dol- lar. Domestic flour will continue to dominate the market throughout 2017/18 with a 98.9 percent market share. According to Global Trade Atlas data, Turkey held the largest market share of wheat flour exports to Indonesia (52.15 percent), followed by the Romania (18.2 per- cent), South Korea (11.57 percent), and Canada (5.59 percent) in 2017/18. Indonesia is heavily dependent on imports of wheat as the domestic production of grains is close to zero because the local climate does not suit such cultivation.