March 15, 2023

Brazil's corn shipments to China decline in February due to focus on soybeans

Brazil's corn shipments to China dropped sharply in February 2023 due to the increased focus on soybean shipments, and the shift in Chinese buyers towards other countries such as the US and Ukraine for their corn supplies, Nasdaq reported.

Revised trade data showed that Brazil's corn sales to China was 70,000 tonnes in February 2023, from 983,700 tonnes in January and over one million tonnes in December.

Total corn exports from Brazil in February fell by over 60% compared to January, reaching approximately 2.275 million tonnes, as exporters concentrated on delivering the new soy crop to overseas clients.

Paulo Molinari, a corn analyst with Safras & Mercado, said Brazil will only start increasing corn shipments from July, as February is not traditionally a month for corn exports from the country.

Brazil is currently planting its second corn crop, which represents 70-75% of the nation's annual output. After harvesting the second corn crop, analysts will be able to assess China's real appetite for Brazilian corn.

Since authorising Brazilian corn imports late last year, China became Brazil's biggest corn buyer in December and January, according to Brazil trade data. Some forecasts indicate that Brazil may surpass the US as the world's largest corn supplier as early as this year, based on the expectations of strong demand from China.

Frederico Humberg, chief executive officer of trading firm AgriBrasil, said China bought "a lot" of corn from the US in February, leading to a decline in Brazil's sales. The fact that Ukraine remains an exporter, although an unstable one, also creates competition for Brazil.

Trade data showed Brazil exported 542,000 tonnes of corn to Japan and 276,200 tonnes of corn to South Korea in February.

-      Nasdaq