Brazil corn exports to China expected to jump

Brazil is poised to export up to 4mn metric tonnes of corn to China in 2023 and the country also may sharply boost shipments this year, as difficulties exporting grain from Ukraine continue to influence the international market.

Despite being one of the world's largest corn exporters, Brazil sells low volumes of the grain to China, the world's largest importer. In 2020, for example, Brazil shipped only 23,000t of corn to the Chinese market in a year when it exported a total of 34.4mn t.

The main barrier has been China's concern with phytosanitary issues. But in May, the two countries signed an agreement that should resolve China's concerns. Brazil presented data to prove herbicides are controlling certain weeds in its corn crop, and it is preparing to certify exporting companies to the Chinese market. A pending equivalence agreement would ensure that all genetically modified corn from Brazil is accepted in China.

With the reduction of corn exports from Ukraine, Brazil could export up to 4mn t of corn to China next year, Agrinvest Commodities analyst Eduardo Vanin told Argus. Even this year, the country should export at least 2mn t of corn to China, Vanin said.

Ukraine has been cut off from seaborne loadings that account for more than 90pc of its agricultural exports since Russia's invasion on 24 February. Ukraine's agriculture ministry expects the country to begin the 2022-23 marketing season that starts on 1 July with record old-crop grain and oilseed stocks of 20mn t, compared with only 6.5mn t at the start of the previous marketing year.

China's corn imports totaled 29.5mn t in 2021, mostly from the US and Ukraine. It is estimated that at least 10pc of this volume could be met by Brazil in the future. A study by Brazilian consultancy Céleres projects that in a decade, China's corn imports will rise to 60mn t/yr. This is because China's yields are lower than the world's main corn producers, and also because China has removed corn from a list of products in which the country should be self-sufficient. This change was previously implemented for soybeans, causing Chinese imports to surge.

According to the Céleres study, Brazil could supply 15mn t of corn to China by 2032, while Brazilian corn production could rise to 200mn t in the same period, from 115mn t in 2021-22.

Alessandra Mello