January 9, 2007

 

Corn gains new lustre for Brazil's farmers; exports may rise

 

 

As corn prices stay heated on local and global markets, Brazilian farmers say they are eyeing corn with newfound interest as they begin planting their winter crop--a fact that could boost the country's corn exports in the 2007/08 market year as much as 10-25 percent, say local producers and analysts.

 

"Higher international prices will definitely help in encouraging Brazilian corn exports," said Guilherme Bastos, a partner and director at local Agroconsult consultancy.

 

Agroconsult currently forecasts that Brazil will export 4.5 million tonnes of corn from its upcoming 2006/07 harvest of 45.6 million tonnes, up 12.5 percent from an estimated 4 million tonnes the season before.

 

Local RC Consultores--which pegs Brazil's corn exports for the new season at 4.4 million tonnes out of a 42.1 million tonne 2006/07 crop--notes that the country could even export as much as 5 million tonnes this year, depending on the size of its winter crop.

 

"We estimate (corn) prices on the local market will be nearly 30 percent higher in 2007 than in 2006, which will help producers gain an additional 4 to 5 billion Brazilian reals in revenues this season and reverse the difficult cycle they've faced," said Fabio Silveira, a partner and director at RC Consultores.

 

After two hard seasons for Brazilian grain and soybean farmers, local producers agree that they are relieved and hopeful that rising global grain and oilseed prices--spurred by US farmers converting more corn to ethanol production--have pushed up prices on Brazil's domestic market and improved this year's prospects.

 

"Brazil isn't a big exporter of corn," said Cesario Ramalho da Silva, the president of a key local farm lobby, the Brazilian Rural Society, or SRB. "But corn is turning into a star this season, and the winter crop this year could be a record."

 

Not everyone is convinced, however, that Brazil will have higher corn exports in the coming year.

 

Consultancy Safras & Mercado currently forecasts that the country's sector will export 3 million tonnes of corn for the 2007/08 market year, down from the estimated 4.05 million tonnes shipped abroad the season before.

 

"If Brazil produces 45 million tonnes of corn, then Brazil could perhaps export 5 million tonnes," said Paulo Molinari, a Safras & Mercado analyst, adding that the consultancy currently estimates a 2006/07 crop of 42.1 million tonnes.

 

"However, looking at the sales of seeds to planted area, Parana--Brazil's largest producer of corn--has reduced planted area by 14.7 percent for its summer crop, and Rio Grande do Sul has reduced it by 14 percent," he said.

 

Brazil's winter crop for corn is generally harvested in August and September, while its centre-south summer crop is harvested starting in February.