December 1, 2022

Corn buyers in Europe concerned Brazil supplies will dry up due to Chinese demand

Corn buyers in Europe are concerned that China's growing demand for the commodity will dry up competitively priced supplies from Brazil, Hellenic Shipping News reported.

China typically purchases corn from the US and Ukraine, but is now interested to buy from Brazil. After Russia invaded Ukraine on February 24, China tried to diversify its corn import sources rather than relying primarily on the US. Important export agreements were reached between China and Brazil in May, and the first shipment of 67,000 metric tonnes of Brazilian corn left Brazil on November 23 for China.

Information from the US Department of Agriculture showed Ukraine's total grain exports in the marketing year 2022–2023 are predicted to be 15.5 million metric tonnes, down 42% from the previous year due to Russia's invasion.

Data from the EU Crop Observatory showed Europe has been importing historically high amounts of corn due to unusually dry weather during crucial growing months, at 11.54 million metric tonnes as of November 21 in the current MY 2022–23 compared to 5.09 million metric tonnes in the same period last year.

Brazil is the EU's primary corn supplier. The EU Crop Observatory said as of November 21, Brazil had exported nearly 6 million metric tonnes of corn to the bloc for MY 2022–23, followed by Ukraine with 4.8 million metric tonnes. European nations that import the most corn are Spain and the Netherlands.

Brazil is a major supplier of corn to the EU, so it is subject to any changes in prices and supplies from that country.

Anec, the Brazilian organisation that exports grains, said China is anticipated to purchase 5 million metric tonnes of corn from Brazil in 2023. Additional shipments are anticipated in the upcoming weeks following the first shipment on November 23.

-      Hellenic Shipping News