Brazil books 25,000 tonnes of Russian wheat -sources

SAO PAULO/MOSCOW, July 5 (Reuters) - Brazil has bought a cargo of 25,000 tonnes of wheat from Russia, according to two sources with knowledge of the negotiations, the first such deal since both countries’ governments finalized talks to liberalize bilateral grain and meat trade in December.

The sources, who asked not to be named because the talks are private, said the cargo will head to ports in northeast Brazil and then to supply mills located in the region.

This would be the first import deal for Russian wheat since 2010, when Brazil bought 29,700 tonnes, according to Brazil’s Agriculture Ministry. Before that, there was only one deal reported in 2002 for 9,900 tonnes.

Phytosanitary issues have for years barred any potential Brazilian deals for Russian wheat.

But Brazil and Russia opened talks last year in an effort to find a common ground for trading of cereals and meat. The Russian government was hoping to find new markets for its grains after bumper harvests and Brazil was looking to expand sales of poultry, beef and pork.

Late last year, Brazil published new legislation clearing imports of Russian wheat.

But last December, Russia placed temporary restrictions on imports of pork and beef products from Brazil after a banned food additive was found in some shipments.

One of the sources said the wheat cargo was sold by commodities trader Sodruzhestvo. There was no exact information regarding the buyer.

Bunge Ltd, Brazil’s largest wheat processor with mills in several states, including on the Northeast coast, said through its press office in Sao Paulo that “it was not among the buyers”.

Brazil is one of the world’s largest grain producers, but grows mostly soybeans and corn. The country is a net importer of wheat and sources most of the cereal in neighbor Argentina, which is not subject to any tariffs since both countries are members of the Mercosur trade bloc.

Wheat imports from other origins outside Mercosur, which is comprised by Brazil, Argentina, Paraguay and Uruguay, are subject to a 10 percent tariff.

“Northern Brazil is not so close to Argentina freight-wise. It is common for them to get wheat from other origins. The most demand and population are in the central to southern regions (of Brazil), where Argentine wheat is competitive,” said David Hughes, president of Argentina’s wheat industry chamber Argentrigo.

Argentina is in a between-crop period for wheat, which probably made Russian wheat more competitive since the country is currently harvesting the cereal. (Reporting by Polina Devitt in MOSCOW, Hugh Bronstein in BUENOS AIRES and Marcelo Teixeira in SAO PAULO; editing by G Crosse)