February 28, 2007

Sorghum rises in the wake of corn prices

Sorghum is literally "hitching a ride" from corn, in the sense that both serve as animal rations and, as a result, prices are higher and exports are up. Sorghum prices rose 30 percent over the same period last year and it is estimated that exports will double.

Sorghum has nutritional characteristics similar to corn. A total of 54.9 percent of the crop in Brazil is grown in the Midwest. According to Marden Teixeirense, technician of the planning department of the national supplies company, Companhia Nacional de Abastecimento (Conab), the price of sorghum in January paid to producers in Goias, the state which produces the largest percentage of the crop, was R$14.62 (US$6.96) a bag (60 kg), up 34.12% over the average of R$10.90 (US$5.19) recorded last year. In 2006, sorghum prices ended the year with a 24.7 percent increase, from R$10.90 (US$5.19) per bag, in January 2006, to R$13.59 (US$6.47) in December.

Teixeirense said the increase in corn price would also augment sorghum prices since they have similar nutritional characteristics. 

Meanwhile, the price of corn paid to the producer in Goias is about R$19 (US$9.05) a bag (60 kg), 28.7 percent more than the average R$14.76 (US$7.03) last year, said Teixeirense. Depending on the region, the price of sorghum is equivalent to 80 percent of the price of corn. He said the good price of corn, due to increased ethanol

production in the U.S., will improve the market for sorghum in Brazil. The U.S. should consume nearly 30 million tonnes of corn to produce ethanol this year.

Teixeirense noted that more corn is exported; the market also increases for sorghum for feed in poultry, pork 

and other animals.

He expects the price of sorghum to remain at the current level during the off season. The grain will begin to be sown this month and harvested in July and August. He said that the product is being sold above the minimum price, of R$9.80 (US$4.67) a bag in the Southeast and Southern Central regions. In the North and Northeast, except southern Bahia, the minimum price is R$11.20 (US$5.33) a bag.