exportação de corn / milho
Grains

Brazil wants to increase the volume of imported corn from Paraguay to deal with price hikes

Jun, 01, 2022 Posted by Gabriel Malheiros

Week 202222

The meat industry in the south of Brazil, the largest consumer of corn used in animal feed in the country, is increasing the volume of corn imported from Paraguay to circumvent high production costs. Industry insiders and analysts heard by Reuters told that the grain from the neighboring country is already proving itself more competitive.

On the one hand, local corn prices were boosted by the war in Ukraine and expectations of higher exports from Brazil, especially if a record production is confirmed in the second crop.

On the other hand, the Paraguayans also start a full harvest in June and have a strategic location for deliveries in the South, although an operation by Brazilian agricultural inspectors on the border worries the chain.

Cooperativa Central Aurora Alimentos, Brazil’s third-largest poultry and pork processor told Reuters it would buy corn from Paraguay.

“The main industrial units of Aurora Coop are located in the west of Santa Catarina, a region close to Paraguay, a situation that facilitates this operation”, said in a note the vice president of agribusiness of the cooperative, Marcos Antonio Zordan.

He said that the input will come by road and will enter the country through Porto Seco de Dionísio Cerqueira, Santa Catarina region.

“The volume of purchases will depend on price negotiation.”

The Paraguayan consultancy DasAgro estimates the country’s corn exports at between 3.5 million and 3.8 million tons, of which 2-2.5 million could come to Brazil this commercial year, which started in May in Paraguay. That volume would be about double that seen in the past cycle.

“From May/2021 to April/2022, Paraguayan corn exports totaled 1.3 million tons, 99% of which to Brazil,” DasAgro managing partner Esther Storch told Reuters.

According to her, the imported corn from Paraguay is priced at around US$230 to US$235 per ton at the border, plus US$5 freight, with delivery scheduled between June and July.

This means that the imported ton would cost around 1,142 reais per ton, considering the future exchange rate with the dollar at 4.76 reais.

S&P Global analyst Gabriel Faleiros calculates that, in the domestic market, corn is quoted in Cascavel (PR) at 1,475 reais per ton, and even with the start of the national harvest, in June/July, this value would be close to the parity of exports for the period, around 1,400 reais, as the country is entering the export season.

“If we take the Paraguay border in Salto del Guairá, it’s very close to Cascavel, or even Foz do Iguaçu (PR), the freight is small… So, in fact, the cost of this importation from Paraguay is cheaper than ours and this comparison makes sense,” he said.

“We also estimate strong exports this year and that contributes. We imagine that, with very expressive volumes of corn leaving Brazil, this contributes to having volumes entering this year, especially in recent months.”

Much of Brazil’s corn exports leave through the port of Santos, where the product arrives largely by rail, brought from the Midwest. The South of Brazil, on the other hand, does not have such favorable logistics to receive cereal from Mato Grosso, for example.

In this scenario, the president of the Santa Catarina Association of Pig Breeders (ACCS), Losivanio Luiz de Lorenzi, stated that the State lost a lot of production with the drought last year, and now it will have to import 4.5 million tons “not only from Paraguay, but he (country) will definitely be a great supplier”.

The vice president of the Paraná Sindiavipar poultry union, José Antônio Ribas Júnior, pointed out that the industries “have been looking for more grain from Paraguay, because it is a grain of excellent quality, just like the one from Brazil”.

“In Brazil, we see a good crop, but we need to work to not be so exposed (to costs),” he commented, citing that the sector has used imports and winter cereals as alternatives to reduce expenses with animal feed.

Neighbor 

The director of DasAgro said that the production of the cereal that will begin to be harvested in June is estimated at 5.5 million tons, against 3.135 million in the previous cycle.

This is because the Paraguayan “safrinha” (the interim crop) planted area reached 910,000 hectares, 20% more than the previous year and 33% above the historical average of the last five years.

“Corn prices were a trigger for the increase in planting, but also the soybean harvest that was much anticipated due to the drought, and the losses of the summer soybean crop”, she said, describing a scenario similar to what happened in the Brazilian crop. of the southern region.

“So part of the reason for a higher production was to take advantage of the corn planting window and bring planting forward by almost 30 days this year,” he added. The ideal window for sowing cereal in the neighboring country is the month of February.

She pointed out, however, that it has been difficult to maintain fluid shipments to Brazil, mainly through the Ciudad Del Este/Foz do Iguaçu border, which represents 50% of corn exports to Brazilians, due to the standard operation of agricultural inspectors that increased the average time of shipping in the region from 3 to 10 days.

“If this border situation is not resolved, allowing for a continuous flow of shipments, probably Paraguay’s corn exports will be more massive through the Paraguay/Paraná Waterway, which takes 15 to 20 days.”

Source: Money Times

To read the full original article, please go to:

https://www.moneytimes.com.br/brasil-busca-maior-importacao-de-milho-do-paraguai-para-lidar-com-alta-de-precos/

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