Brazil poised to maintain corn export dominance until 20233

Brazil, having seized the mantle of global corn exports in the 2022/23 crop year, appears poised to maintain its dominance despite the uncertainties of current times.

The trajectory of Brazilian soybean exports continues its upward trend, set to surpass total American production at the outset of the next decade.

These are projections put forth by the United States Department of Agriculture (USDA) for Brazil over the next decade, derived from an annual study evaluating export trends of the United States and other global producers.

Vegetable oils, particularly soybean oil, are gaining traction in the shift towards clean, renewable energy, driven by increased biodiesel and renewable diesel production.

While corn, a staple in renewable fuels in the United States, is forecasted to witness minimal fluctuations but a surge in Brazil’s context. Regarding biodiesel, Brazil must look to Japan and India, emerging as key external demands; for ethanol, the focus should turn to Indonesia, Malaysia, and South Korea.

These new projections, indicating Brazil’s substantial advancement in the global market, hinge on various factors including climatic influences, geopolitical tensions, producer income, costs, interest rates, and the trajectory of the global economy.

Projections for Ukraine, for instance, remain conservative given the geopolitical uncertainties following Russia’s invasion. Ukraine possesses an annual potential for corn exports of 35 million tons, yet USDA’s forecast maintains it at 19.5 million over the next decade.

A significant share of the anticipated surge in products entering the external market over the next decade will emanate from Brazil, according to USDA. If realized, Brazil is poised to supply 72% of the additional soybeans entering the global market in the coming years, 46% of corn, 62% of beef, 61% of poultry, and 32% of pork.

The following chart shows Brazil’s export volume of corn from January 2022 and December 2023. The data used below was sourced from DataLiner.

Brazilian Corn Exports | Jan 2022 – Dec 2023 | WTMT

Source: DataLiner (click here to request a demo)

A notable shift in the protein landscape will be the rise of pork in the United States trade balance, surpassing poultry in 2031 after overtaking beef in exports back in 2004.

Brazil’s notable strides will be witnessed in soybean and corn exports. Soybean exports are forecasted to reach 133 million tons in the 2033/34 crop year, far surpassing the 58 million projected for the Americans.

Following the trade disputes with China during the Trump administration, the United States is now recalibrating towards the domestic market, having lost its preference among major importers.

In this recalibration, the Americans are prioritizing value addition to soybeans, primarily through renewable diesel production—a pathway Brazil should consider pursuing.

With an inward focus, the United States is seeking higher-quality soybean oil and diversification in its applications. “With increased domestic demand, attention towards China diminishes,” remarks Daniele.

China, however, remains a cause for concern as it seeks reduced dependence on soybeans, amid slowing population growth, declining pork consumption, and tepid interest in chicken, impacting soybean meal demand.

What’s garnering consumer interest, particularly amidst rising incomes among a significant segment of the Chinese populace, is beef.

According to USDA projections, China is expected to import 138 million tons of soybeans in 2033/34, a 38% increase from current levels. Corn imports are forecasted at 26 million tons, and beef imports at 3.9 million tons.

USDA remains steadfast in its belief that Brazil will assume global leadership in corn exports, projecting a total of 77.5 million tons in the next decade.

Brazil’s claim to leadership in the current year is subject to debate, with two critical factors warranting consideration in USDA’s assessment.

Firstly, the agency’s estimates for national production stand at 124 million tons for the 2023/24 period, contrasting with Conab’s figure of 114 million post-climate impact.

Secondly, USDA’s commercial calendar, spanning from October to September, reflects Brazil’s export of 27 million tons by January in the 2023/24 crop year, slated to conclude in September.

Source: Folha de S. Paulo

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