Brazil raises tariff-free wheat import quota again, to 3.3 mln T

SAO PAULO Wed Oct 30, 2013 10:24am EDT

SAO PAULO Oct 30 (Reuters) - Brazil's Trade Ministry said on Wednesday it raised the quota for tariff-free wheat imports again, this time by 600,000 tonnes to 3.3 million tonnes, as the Southern Cone struggles to produce the grain this season.

The ministry started the quota in April, freeing some wheat from a 10 percent import tariff, after output losses in southern Brazil and in Argentina, typically Brazil's main supplier of the grain.

The tariff-free quota applies to wheat that lands in Brazil by Nov. 30.

Brazil, often one of the world's biggest importers of the grain, has purchased nearly all of its tariff-free wheat from the United States and Canada, which produce hard wheats that local mills prefer.

Wheat trade among countries in the Mercosur customs union - Brazil, Argentina, Uruguay and Paraguay - is tariff-free. But due to the trade agreement, all wheat from outside the bloc requires a 10 percent tariff, except in extreme circumstances.

The Argentine government earlier this year restricted wheat exports after local prices for the grain hit record levels, raising concerns over food inflation. (Reporting by Reese Ewing; Editing by John Wallace)