1. Commodity News

Brazil Becomes World’s Second Largest Corn Exporter after the US

Abha Toppo
Abha Toppo

Corn production in Brazil has been increasing steadily over the past ten years and now it has become the second largest exporter of corn in the world after America. 10 years ago, Brazil was responsible for just 1 percent of global corn exports and currently it accounts for 25 percent of the world's corn exports.

Rise in corn production in Brazil can be attributed to the considerable increase in safrinha corn production that is the 2nd crop of corn produced after the 1st crop of soybeans is harvested. The safrinha corn crop in the country at present represents nearly 72% of Brazil's total corn production. Brazil's safrinha corn acreage is likely to continue increasing because when its soybean acreage increases, the safrinha corn acreage will also increase.

The 2018-19 Brazilian safrinha corn crop is impending harvest and growers are very hopeful about their corn production. The USDA in their latest monthly report had increased their estimate of the Brazilian corn crop by 4 million tons to 100 million tons that will be a record corn crop in the country. Brazil's corn exports in this year could be as high as 32 million tons or say nearly 30 percent more than previous year.

Mato Grosso is the main corn producing state in Brazil & the Mato Grosso Institute of Agricultural Economics (Imea) said that growers in the state have now forward contracted 62 percent of their expected 2018-19 corn production that represented a progress of 3.8 percent during April & it is now 5 percent more than last year at the same period. The average corn cost so far has been R$ 19.91 / sack.

Brazil's corn crop is also used to produce ethanol. The 1st corn-based ethanol facility in Brazil began operations in June 2017 & many corn-based ethanol facilities are planned to come on line in the next few years. Corn already accounts for 4.6 percent of Brazil's total ethanol production & it is growing rapidly. It is projected that there would be US$ 1.26 billion in investments in corn-based ethanol production in the next 4 to 5 years in Brazil.

Corn is a feasible option for ethanol production in the center-west region of the country where there is an excess of corn production & comparatively low corn prices. It is more gainful to turn corn into a value added product like ethanol than to pay so high transportation costs to move the corn to distant export facilities.

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