August 27, 2007

EU expected to import more Brazilian corn

Brazilian corn shipments to the EU may surge in the coming weeks as EU authorities sought to counter soaring grain prices, brought about by a grain shortage.

French analyst Strategie Grains, which sharply cut its estimate of Europe's corn  output this season, said last week the EU would need to import eight million tonnes of corn in 2007/2008 to cover demand.

Already, French feed maker Glon is importing a cargo of 35,000 tonnes of Brazilian corn. The shipment was of particular concern as France, the largest European corn producer, usually imports little corn. Last season, shipments totaled just 70,000 tonnes. 

Tighter supplies due to dry weather conditions has also prompted other EU countries to expand shipments.

German feed makers had purchased over 100,000 tonnes of Brazilian corn in the past two weeks as they migrate from wheat due to its high prices. Italy is expected to receive 50,000 tonnes by November. Even Hungary, a prodigious corn producer, has resorted to imports due to a 50 percent cut in output this year. The country's farm ministry say Hungary could be half a million tonnes short of animal feed grains. The country has had to import due to strong demand from neighbouring countries like Romania.

Main destinations for imported corn are expected to be Romania, Italy and France, with most of it coming from Brazil.

Besides being cheaper, Brazilian corn suppliers also wield an advantage over US and Argentinean corn suppliers as they were able to guarantee non GM-corn.

EU's Brazilian corn imports are expected to double to a record 5.8 million tonnes in 2007/2008 -- compared to 2.45 million tonnes last season, according to Strategie Grains. This is out of a total 8.1 million tonnes, meaning 70 percent of EU's corn imports would come from Brazil.