Brazil’s Reign as Top Corn Exporter at Risk of Ending in 2024

Brazil, which became the world’s top corn exporter in 2023, outperforming the United States, may lose its leadership in 2024. This milestone, achieved only twice before—in 2013 and last year—saw Brazil export a record-breaking 55 million tonnes of corn in 2023.

This impressive performance was driven by an exceptional bumper harvest, increased external demand, and the competitiveness of Brazilian corn. However, the outlook for 2024 appears less promising. Projections indicate a significant drop in Brazilian corn shipments due to several damaging factors, including reduced output and heightened international competition.

“Brazil is expected to export between 35 to 38 million tonnes of corn in 2024, a substantial decrease compared to the previous year. The combination of lower domestic output and a rebound in U.S. production, along with the return of major exporters like Argentina and Ukraine into the playing field, is diminishing our competitiveness in the global market,” says Enrico Manzi, Country Manager at Biond Agro.

The following chart uses DataLiner-derived data to show the month-on-month progression of corn shipments from Brazil between January 2021 and June 2024. A demo is available upon request through the link below.

Corn Export Volume | Jan 2021 – Jun 2024 | WTMT

Source: DataLiner (click here to request a demo)

Factors Leading to Reduced Exports

It’s essential to review the factors leading up to Brazil’s leadership in 2023 before delving into the adverse factors seen in 2024. According to Conab, the record corn harvest in Brazil, which exceeded 130 million tons, was a product of favorable weather conditions and improved agricultural practices.

This exceptional performance occurred amid rising global demand, particularly from markets such as China and the European Union. Additionally, problems with corn yields in the U.S. due to adverse weather conditions and a shift towards biofuels positioned Brazil as the top exporter of the grain last year.

For 2024, the export scenario is expected to differ:

Reduced Output: Forecasts indicate Brazil’s corn output will be lower in 2024. Adverse weather conditions and a potential reduction in planted area could decrease production to around 115 million tonnes, according to Conab estimates.

Revamped U.S. Production: The U.S. is expected to recover its corn production in 2024, with forecasts suggesting an abundant harvest due to improved weather conditions and increased acreage. The latest USDA figures predict about 385 million tonnes could be harvested there, potentially reducing the competitiveness of Brazilian corn.

Increased International Competition: Other major corn exporters, such as Argentina and Ukraine, went through a rough patch in 2023 and are expected to re-enter the market firmly in 2024, intensifying competition and pressuring Brazil’s export volumes.

Lower Global Demand: A potential global economic downturn could reduce demand for farming commodities, including corn. The global economy faces uncertainties, with forecasts indicating slower growth in major economies like China and the European Union.

“By August, Brazil had exported around 16.5 million tonnes compared to 24.5 million tonnes in 2023, 18.7 million tonnes in 2022, and an average of 17.65 million tonnes over the past three years, suggesting final export figures will likely range between 35-38 million tonnes,” added Manzi.

Mitigating Impact on Brazilian Producers

Despite increasing domestic consumption in Brazil—driven primarily by the demand for using corn in ethanol production—a larger global supply coupled with declining exports could continue to exert pressure on domestic corn prices.

The year 2024 presents significant challenges for Brazilian corn producers. Reduced competitiveness relative to the U.S. and Argentina, leading to price pressures, entails a more strategic approach and quick adaptation to market changes.

Source: Notícias Agrícolas

Click here to access the original news text: https://www.noticiasagricolas.com.br/noticias/milho/383600-brasil-pode-perder-o-ranking-de-maior-exportador-de-milho-em-2024-diz-biond-agro.html

Sharing is caring!