March 1, 2023
Brazil may surpass the US in global corn exports
Brazil and the US compete for soybean and corn international markets, but the USDA said Brazil may surpass the US as the leader in global corn exports, Victoria Advocate reported.
US corn exports have decreased by 30% over the past two years, from 69.8 million tonnes in 2021 to 48.9 million tonnes in 2023.
Brazil's trade will reach 50 million tonnes this year, representing a 138% increase in exports over the same period. But even with a 5% reduction in area and a 9% increase in harvest, the US will still produce 348.7 million tonnes more corn than Brazil, which will only produce 125 million tonnes.
China, the biggest corn importer, changes the market's dynamics. In November 2022, the Asian nation authorised importing the product from Brazil, and it purchased 1.1 million tonnes in just the final two months of 2022.The US (15 million tonnes) and Ukraine are the other two top exporters to China (3 million tons).
China has consistently reduced imports over the last three years while predicting a record domestic harvest. The US-China conflict and the war between Ukraine and Russia have affected the supply chain, allowing Brazil to increase its market share.
The USDA forecasts that Brazil will export 92 million tonnes this year, compared to the U.S.'s 54.2 million tonnes. In other words, over the past year, Brazilian exports have increased by 16% while American exports have decreased by 8%.
However, a major Brazilian bank, Agro Ita BBA, reported that Brazil's cost of production increased 38% for the current crop season. The rise in input costs is said to be affected by the Ukrainian conflict on fertiliser prices. Brazil's production is heavily reliant on the global fertiliser market. For instance, in 2022 the nation imported 85% of the fertiliser used domestically, spending 64% more for a volume that was 9% lower.
Brazil has benefits like a favourable exchange rate and lower labour costs, but the American industry knows how to enhance the value of corn and soybeans in order to appeal to more affluent markets.
A surplus of soybean meal lowers the cost of feeding animals. Local consumers might pay less for meat as a result.
- Victoria Advocate