- By Region
Brazil is gearing up for its biggest ever exports of corn this year, filling the void left by the US as the world’s top shipper of the grain struggles to emerge from the worst drought in half a century.
Analysts are forecasting the Latin American country could export as much as 15m tonnes this year and 20m tonnes next year, putting Brazil in the running with Argentina and Ukraine for the title of the world’s second-biggest corn exporter.
“There is no way the US will be able to meet the needs of their customers this year, but Brazil is in a position to step in,” said Marcos Rubin, at the Brazilian consultancy Agroconsult. “There is every reason for exports to surprise to the upside,” he said.
However, bottlenecks at Brazil’s ports and poor road networks could limit exports, said Anderson Galvão at the Céleres consultancy who is forecasting shipments of 17m tonnes next year – still an all-time record for the country.
Brazil’s corn farmers are already on a high after it emerged last month that US meat companies including top pork producer Smithfield Foods had placed orders in the country – thought to be the first Brazilian corn exports to the US in history.
The Latin American country has long established itself as one of the world’s agricultural superpowers, ranking as the top exporter of sugar and a major producer of other commodities, but soya crops have traditionally taken priority over corn.
Surging demand for protein from Brazil’s top trading partner, China, meant that Brazilian soya exports jumped 41 per cent last year and now account in value terms for 9.1 per cent of total Brazilian exports.
However, greater investments in technology and the development of new corn variations have recently allowed farmers to grow a second corn crop, or “safrinha”, (literally, “little harvest”) in the first few months of the year on the back of early soya harvests.
“These ‘safrinhas’ used to be sporadic but with technology, Brazil learnt how to grow more and more and productivity grew rapidly,” said Alysson Paolinelli, former Brazilian minister of agriculture and head of Abramilho, the national association of corn producers.
Last week, Brazil statistics agency IBGE raised its forecast for the country’s corn production this year to 71.5m tonnes – an increase of 27 per cent from last year.
Unlike in the US, where droughts have destroyed one-sixth of the US expected corn crop in as little as a month, adequate rains during Brazil’s second corn growing season have more than made up for a weak summer harvest.
However, once the US returns to normal corn production, Brazil is likely to find less buyers in the market and may only be able to export around 12m or 13m tonnes in 2014, said Agroconsult’s Mr Rubin.