February 3, 2012

 

Mexican, South African corn imports may hit record level

 

 

Dry weather has also increased pressure on crops in South Africa and in Mexico, whose imports of the grain appear ready to set a record more convincingly than had been expected.

 

USDA foreign staff cut their estimate for the 2011-12 corn harvest in South Africa by more than 400,000 tonnes to 12.07 million tonnes, citing "dry weather conditions that persisted during the planting season", so delaying sowings.

 

For Mexico, the corn harvest estimate was cut to an 11-year low of 18.4 million tonnes, two million tonnes less than the USDA's latest official forecast, which will be upgraded next week in the latest Wasde report on world crop supply and demand.

 

Mexico's farm ministry lowered its own estimate for 2012 production on Tuesday (Jan 31) to 21.8 million tonnes, well below the 25 million tonnes initially hoped for.

 

"Mexico is being battered by its worst drought in seven decades, which has devastated the rural sector and is expected to continue throughout the year," the USDA's Mexico City bureau said, adding that nearly 70% of the country had been affected.

  

The "prolonged" drought, "caused by two dry winters and a rainy season with less rainfall than expected", has lifted yield losses in spring-summer corn, and reduced expectations for sowings in the autumn-winter cycle.

 

In the main producing state of Sinaloa, where frost last year added to farmers' hardships, sowings of autumn-winter corn are expected to drop by 140,000 hectares.

 

The production shortfall leaves Mexico facing imports up 36% at 10.5 million tonnes in 2011-12, some 700,000 tonnes above official USDA forecasts, and well above the current record of 9.56 million tonnes set four seasons ago.

 

The corn harvest downgrades come as hopes for global production raised by a record Ukrainian harvest have been hurt by weaker expectations for Argentina, the second-ranked exporter, where drought dashed ideas earlier in the season of a bumper 29 million-tonne crop.

 

Some forecasters have pegged the Argentine crop at 17-18 million tonnes, although thanks to recent rains "expectations for the harvest have "now stabilised at 21-22 million tonnes", broker US Commodities said.

 

Mexico has so far in 2011-12 imported 3.5 million tonnes of corn from the US, up 70% on-year, with a further three million tonnes in orders outstanding.

 

It has also bought more than one million tonnes from South Africa, the fifth-ranked exporter, since May, up from 72,000 tonnes in the previous 12 months.