August 15, 2007

Brazil sells 2007/08 corn in advance over strong EU demands

Brazilian corn farmers are selling forward 2007/08 crop to be shipped from March 2008, as international demand for the cereal remains strong, particularly in the European Union, market sources said.

A trader from Sao Paolo said the rapid sales were due to strong European demand as some parts of the region are currently hit by drought. Moreover, Brazilian corn is not genetically-modified which is banned in EU.

This is the first time sales of corn for Brazil has occurred so early in the year as experts signify that the country is an emerging major corn exporter.

Advanced sales of Brazilian soy -- the country's top export-- are already common. Brazil is the second largest player in the global soy market after the United States.

Traders said forward sales of corn had already started from 2006 winter crop after world's major corn exporter, US, started using large volumes of grain to produce ethanol. The ethanol boom also caused record corn price hikes. 

Traders said they consider forward sales of corn to be shipped in 2008 a "good start" for the next crop, indicating that exports could be as strong as this year.

Brazil is tract to ship 7.5 million to 8 million tonnes of corn in 2007, twice the amount registered the year before.

The volume is especially high considering that Brazil is the world's largest poultry exporter and a major pork producer. The country usually directs about 70 percent of its corn crop to animal feed.

Brazil's 2006/07 corn crop is projected at a record 50.6 million tonnes, according to the Agriculture Ministry.