Freight costs consolidates as bottleneck for corn exports in Brazil

According to a September-released study by Rabobank, Brazilian corn production is expected to reach a record volume of 114 million tons in 2021/22 (summer crop + safrinha). The volume is equivalent to an increase of 26 million tonnes compared to the previous corn harvest cycle, despite increasing freight costs.

Despite the low amount of rainfall in Brazil’s central states, a significant portion of the crops was planted during the ideal time window, which reduced the productivity losses of safrinha corn (Brazil’s second corn crop), according to Rabobank.

Brazilian corn exports should increase due to record-high production in Brazil and a sharp decline in Ukrainian corn exports. High freight costs in Brazil nevertheless constrained the pace of corn exports.

According to government data, total corn exports in the year reached 17.9 million tonnes, an increase of 79% compared to the previous cycle. However, despite the growth in exports compared to 2021, the volume is still far below the volume exported before the pandemic, when Brazil exported 22 million tonnes in the first eight months of 2019.

See below the track record of the volume of corn (HS 1005) exported by Brazil between January 2019 and August 2022. The data is from DataLiner.

Corn Exports | Jan 2019 – Aug 2022 | WTMT

Source: DataLiner (click here to request a demo)

A significant reduction in the estimate for the US corn crop could boost Brazilian corn exports during the last quarter of 2022.

Rabobank anticipates that even with record crop yields, corn stocks at the end of the 2021/22 cycle should remain under pressure due to high demand. In this scenario, a 2% slight reduction in global inventories from 2021/22 is anticipated.

Source: Canal Rural

To read the full original article, please go to: https://www.canalrural.com.br/noticias/agricultura/frete-torna-se-gargalo-e-limita-ritmo-das-exportacoes-de-milho/

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