Brazilian and Argentinean farmers are concerned about the decision of President Brazilian President Jer Bolsonaro to purchase 750,000 tons of wheat from the United States and other non-Mercosur trade countries without the 10% tariff that is usually levied on such purchases.

Wheat producers in the agricultural zone of Argentina in Pampas said that if the transaction is permanent, and not one-time, this will have a negative impact, given that Brazil is the main buyer of Argentinean wheat.

"The Argentinean wheat sector completely rejects Brazil’s decision to purchase wheat in the United States without tariffs," the Chamber of Argentinean grain exporting companies said March 20. “According to the Mercosur rules, Brazil must request permission from Argentina, as the main supplier of wheat to a neighboring country, to carry out this operation.”

David Hughes, president of the Argentinean chamber of the wheat industry, ArgenTrigo, said that if a zero-tariff agreement is a one-time exception to the 10% tariff on wheat coming from outside the Mercosur trading block, this will reduce concerns. “But if it turns into the norm, it will be extremely alarming,” he said. Brazilian farmers also noted concerns. “Now there is another 750,000 tons that will compete with national production,” said a source in the wheat industry in Paraná, Brazil’s main wheat production area.