The future of corn in Brazil
Corn is a cereal grown in much of the world and extensively used as human food or for animal feed because of its nutritional qualities. It is one of the most technologically assisted crops, is cosmopolitan, and its production in 2004 reached 600 million tons worldwide. Its name, of indigenous Caribbean origin, means "sustenance of life. A staple food of several major civilizations over the centuries, the Olmecs, Mayas, Aztecs, and Incas revered this grain in art and religion.
Given the high international demand for corn, Brazil is planning to boost its corn exports by 2023. Aiming to increase productivity when cultivating this product, the company Embrapa brought a genetic and genomic analysis of corn and technological innovations for the cereal seed market. This research was presented at the Regular Meeting of the Sectorial Chamber of the Corn and Sorghum Production Chain. Based on the data collected, a rearrangement in the production and dynamics of the work was foreseen, integrating technology and innovation in the agronomic market. The meeting, held last March 7, was conducted by the Sectorial Chamber president, Sérgio Luiz Bortolozo, who recognized the importance of Embrapa in the development of agribusiness in the country. "Embrapa has done a heroic job. Every time we have requested a mission from the institution, it has responded effectively. Today, we have tropical technology and the conditions to become even more competitive," he said.
The numbers show a positive scenario for the Brazilian market, so that the export revenue for the first four months of 2023 will exceed the 2019 total by 154%. Although corn exports were reduced in the month of April, the total amount of shipments made this year was 10.10 million tons. With this, the annual forecast for Brazil is to sell 45 million tons abroad, raising about $12.3 billion, according to the Secretariat of Foreign Trade. According to the Institute of Applied Economic Research (Ipea) there is an expectation of a record production of several commodities in the 22/23 harvest and a forecast of 11.6% growth in the agribusiness GDP. Thus, Brazil would gain even more prominence in the international market.
The main ports through which corn left the country in April were Itaqui (MA) and Barcarena (PA). The two ports exported 2.76 million tons of corn out of the 3.56 million that went through the Arco Norte, representing 78% of the volume covered. A possible explanation for the reallocation of the main export base of Brazilian grains to the North and Northeast of Brazil, would be the cheaper freight costs, besides the large investments of internalization of fertilizers in the region. However, the cheapening of freight costs occurred only in some regions, such as Mato Grosso, which had a significant reduction in its volume. The opposite occurs in Paraná, where the corn harvests showed an increase in freight rates, reflecting the intensification of the harvests.
Corn devaluation in Chicago
With the potentialization of the Brazilian and Ukrainian corn export crops, the global supply of the food increases, intensifying the competition in the United States and, consequently, reducing the price of the product in domestic and international scenarios. The increase in corn productivity brought negative consequences to Chicago, bringing falls in its stock exchange (CBOT).
About the Ukrainian production, its corn shipments in the crop year to April increased 15% compared to the same period last year, to 24.4 million tons, further collaborating to the increase in the global supply of the product.
By: Julia Fragoso in 05/05/2023