June 7, 2012

Brazil, which is expected to become one of the world's biggest importers of grain, should soon obtain clearance to export corn to China, Brazil's agriculture ministry said.

Lino Colsera, the ministry's head of foreign affairs, said he was awaiting the paperwork from his Chinese counterparts that could solidify Brazil's recent emergence as a leading corn exporter, according to a transcription of Colsera's comments at a conference on Tuesday (June 5).

A mission of Chinese technicians visited Brazil in March to assess the phyto-sanitary risks of Brazilian corn, a protocol required to open trade channels in a food commodity. Typically, pest and disease risks from imports are documented and some restrictions on origin of the commodity may be imposed.

"This is very positive. It's a market that's opening," said Colsera.

Brazil has produced a surplus of corn over the past few years which have enabled it to export about eight million to 10 million tonnes a year. Brazil is expected to produce a record 67 million-tonne crop this year and export an unprecedented 11 million tonnes, according to the ministry's food supply agency Conab.

China has for years been the world's top importer of soy, bringing in about 60 million tonnes a year. It had long been a corn exporter when in 2011-12 it surprised the world by importing five million tonnes. It is expected to import seven million tonnes this season.

"It's a historic change and makes total sense considering they import 60 million tonnes of soy. Corn is a natural complement in animal feeds," Colsera said.

With record crops in the pipeline from Brazil and the US, corn prices are expected to weaken this year, but increased demand from China could bolster the market. Local agricultural think tank Cepea/Esalq, which is linked to the University of Sao Paulo, said on Wednesday (June 6) that corn prices "moved down in late May in almost all regions surveyed."

China imports the bulk of its corn from the US, which allocates massive amounts of its crop to ethanol production. This has left other importers undersupplied and opened the door for Brazilian exports of the grain, Colsera said.