Brazil to lead global exports of soy and corn

Brazil has never been more decisive for global food supply than in this 2022/23 harvest. For the first time in history, the country should lead world corn exports and account for almost 55% of soybean shipments, indicated new estimates released yesterday by the United States Department of Agriculture (USDA). With larger harvests this year, Brazilian grains are occupying the space left by American, Argentine and Ukrainian products, whose sales abroad have decreased due to climatic or geopolitical problems.

The USDA projects a Brazilian corn crop of around 125 million tons, or 10.9% of the global total, and forecasts shipments of 50 million tons, 27.6% of the volume transacted between countries. In the 2021/22 cycle, the country accounted for 9.6% of production and 23.5% of shipments. It is worth remembering that Brazil started exporting corn to China last year, and that sales volume tends to increase – regardless of competitors.

In the case of soy, if the projections of the US department are confirmed, Brazil, with 92 million tons, will account for a record share of 54.9% of world exports of soy in grain in 2022/23, compared to 51.4% in 2021/22, with the country’s production representing just under 40% of the global total.

American soybean production is 4.2% lower this season than it was in 2021/22 – 116.4 million tons, due to periods of drought and extreme cold in the last quarter of 2022. Deputy leader in oilseed exports already a few years ago, the country should ship 7.8% less (54.2 million tons).

Corn exports will also fall – 22.1%, according to the USDA – to 48.9 million tons, accompanying the drop of almost 9% in production, estimated by the USDA at 348.75 million tons.

Check below a history of Brazilian corn exports from 2019. The data is from DataLiner:

Brazilian Corn Exports | Jan 2019 – Dec 2022 | WTMT

Source: DataLiner (click here for a demo)

Still at war with Russia, Ukraine is expected to export 22.5 million tonnes of corn, down from 26.9 million tonnes in the previous cycle and 23.86 million tonnes in 2020/21. It is worth remembering that the country resumed shipments through the Black Sea with the creation of a safe corridor brokered by the United Nations Organization (USDA). But the pace so far is below what was observed before the Russian invasion.

The severe drought in Argentina is expected to reduce the country’s corn harvest to 47 million tonnes, down from 49 million in 2021/22. In the case of soybeans, the retreat projected by the USDA is from 43.9 million to 41 million tons in the comparison between seasons. The declines are even more striking in relation to the USDA estimate released in December, when the expectation was for a harvest of 55 million tons of corn and 49.5 million tons of soybeans in this cycle in Argentina.

Francisco Queiroz, an analyst at Consultoria Agro at Itaú BBA, says that crops in Argentina are still in a critical phase, in which they need rain. “This break could be even bigger”, he observes. Yesterday, the Rosário Stock Exchange estimated a harvest of 34.5 million tons of soybeans and 42.5 million tons of corn in the country.

“Part of the reduction in shipments from Argentina, the USDA added to the Brazilian account. Our products gained prominence in the world, because we increased the area and productivity”, says Queiroz. According to him, the dollar above R$ 5 in recent months makes the Brazilian grain cheaper than the American one for importers.

According to the most recent estimates by the Brazilian Association of Vegetable Oil Industries (Abiove), which also projects soybean exports from the country at 92 million tons, the revenue obtained from these sales will reach almost US$ 53 billion. And considering the average price per ton exported in January 2023, in the case of corn, the value tends to exceed US$ 14 billion. In 2022, it was US$ 46.7 billion and US$ 12.2 billion, respectively.

According to the USDA, Paraguay should also increase its international sales of soybeans in this cycle. The country will ship 6.3 million tons of soy, more than double the last crop year and virtually the same result as in 2020/21. In the 2021/22 season, Paraguayan production recorded a sharp drop, which limited shipments.

Source: Valor Econômico

To read the original report, visit: https://valor.globo.com/agronegocios/noticia/2023/02/09/brasil-deve-liderar-exportacao-global-de-soja-e-de-milho.ghtml

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