Brazil could become a major corn exporter to China in 2023 and will need to control production
A China reviewed its commercial relationship with Brazil in relation to corn and found itself faced with the need to purchase the grain, in view of the War in Ukraine against Russia. Thus, Brazil is on the way to becoming a major corn exporter to China. However, this commercial relationship brought some requirements, mainly phytosanitary control to avoid pests and diseases in grains.
As this control procedure had not yet been adopted for the winter crop, the forecast is that corn will only be exported to China in 2023. This is because the summer crop will start already within the standards requested by China to buy corn from Brazil. So, the harvest will be available for the first months of 2023. To understand better, continue reading!
Agreement between China and Brazil for corn exports was revised. Check out more in the video below.
Brazil's national corn market prepares to meet China's demands
This new agreement between the countries brought about ample movement in the domestic private corn market to meet the demand for export. Still this month, a meeting is scheduled between potential exporters of the Brazilian grain, in which the main quality parameters to be followed in the summer harvest will be discussed. The Brazilian Agricultural Research Corporation (Embrapa) is also discussing the matter with the government.
The war between Ukraine and Russia has affected the supply of more than 10 million tons of corn a year from Ukraine to China. The conflict brought a blockade on the Black Sea, the main shipping route for maize between the regions. Even though China is the second largest corn producer in the world, it still needs a large amount of imported corn to meet the entire domestic demand.
The drought in the United States and the War in Ukraine favored Brazil in corn exports
China imports a large part of its corn from the United States and Ukraine, which are its main suppliers. However, the United States is experiencing a drought that could affect up to 70% of the amount supplied to China. In addition, Ukraine is going through a period of war against Russia and its supply is interrupted.
Therefore, China's fears about the shortage of this grain made them go back and rethink buying the grain from Brazil. The agreement had been interrupted by phytosanitary problems and crop pests. The countries have already closed an agreement of more than 200 thousand tons for September 2022 and another million tons should be negotiated for 2023.
Corn could become a great opportunity for rural producers in Brazil, but it could impact the meat sector
Our country currently occupies the third position in the world ranking of the largest corn producers and tends to have a significant growth with the beginning of exports to China. However, with the supply of one of the main grains used in the meat production chain, the sector could be affected. After all, those responsible will need to invest more in feed, in view of the low amount of corn for domestic production.
Therefore, it is essential to think about strategic planning to program purchases and dilute risks, in order to avoid further damage to the domestic market. However, the power of Brazilian agribusiness is breaking barriers and conquering the international market. This is just the beginning, as we still have peanuts and sesame in line to reach new parameters.
