August 4, 2011

 

Brazilian grain exports to increase

 

 

The harvest of winter crop means that August is usually a crucial month for Brazilian corn exports, furthermore, ports' shipping timings imply that grain exports will surge by sixfold from July.

 

Despite the strong showing of corn exports from Brazil so far this year, exports will likely fall shy of last year's near record tally due to harsh weather that sapped some of the productive potential of the local crop this season.

 

Traders said that shipping line-ups showed that corn exports are expected to reach at least 1.6 million tonnes this month compared with 271,000 tonnes in July. In August 2010, exports of the grain hit 1.2 million tonnes.

 

"Just Santos Port alone should ship 1.1 million tonnes. Some shipments that were delayed in July will leave in August," a trader said.

 

Brazil has become the world's number three corn exporter in recent years after the US and Argentina.

 

Through July, Brazil exported three million tonnes of corn, trade ministry data showed. This compares with 2.35 million tonnes shipped over the same period of 2010.

 

In 2010, Brazil shipped 10.8 million tonnes of the grain, just shy of the record export year of 2007 when nearly 10.9 million tonnes were shipped abroad.

 

Government subsidies for corn transport costs offered last year to reimburse traders for getting the grain from the interior of the country to the ports was part of the reason for the near record 2010 exports.

 

CBOT corn prices hit record territory in early June at US$8 a bushel and jumped sufficiently to stop trading on Tuesday (Aug 2) at US$7.11 a bushel after a prolonged US heat wave triggered concerns over possible crop damage.

 

Traders said that although international prices are more attractive than last year, domestic prices are BRL2 (US$1.28) per 60-kg bag higher than FOB prices at the ports.

 

One of the reasons for the strong domestic price is due to the frosts and dry spells over important corn producing regions of the country earlier this season, which trimmed at least a few million tonnes of potential from the expected harvest.

 

Brazil is forecast to produce 57 million tonnes of corn this year, most of which goes to produce pork and poultry.