January 20, 2009

Brazil starts strong corn exports for 2009

After robust corn shipments in late 2008, Brazil continues its strong export run this year with 600,000 tonnes scheduled to leave local ports this month, grain experts said on Thursday (January 15).


Brazil shipped 1.3 million tonnes of corn in December last year it's biggest in 2008 which registered just over 5 million tonnes exported through November. Bumper crop and favourable prices have the country's corn exports reach 10 million tonnes in 2007.


Brazil is likely to retain its position as the world's No.3 corn exporter in 2009 after the United States and Argentina despite recent drop in international corn prices this week, according to specialists.


The Brazilian real has been putting wind in corn exports, depreciating sharply against the dollar since September after gaining steadily for several years to its strongest point at around 1.56 to the dollar.


The US and Argentine corn exports are not expected to be as strong this year, relatively speaking.


Analyst Lucilio Alves of the Cepea think tank said the US will begin 2009 with less corn exports due to greater domestic consumption and Argentina will likely suffer huge losses due to drought.


This may leave opportunities for Brazil to enter its non-traditional markets.


Brazil's agriculture ministry forecasts 2008/09 corn exports at 8 million tonnes.

Pedro Collussi of analytical firm AgraFNP said the reduction in the cost of international freight due to falling economic activity during the current economic crisis would also favour Brazil.


Collusi also noted that while international corn trade will shrink in 2008/09, along with world production of corn and wheat, the past two months showed that Brazil can still get significant shares in the smaller market.


Brazil's bumper 2007/08 corn crop of 58.6 million tonnes will help domestic consumption by the country's large poultry and hog industries as it was not fully consumed or exported over the past year. The new crop though is seen to be not as big due to drought.


Domestic corn prices remain firm, however, and may compete with export prices which weakened earlier this week.