Int’l demand for Brazilian corn to remain heated despite shipments in Ukraine

The international demand for corn from Brazil should remain heated this year despite the possibility of grains being shipped again from Ukraine, one of the leading suppliers of cereal products and a competitor of Brazil in exports, as per the assessment of industry members and analysts heard by Reuters.

The first carrier filled with corn since Russia’s invasion of Ukraine left the port of Odesa for Lebanon on Monday, August 1st, as part of a deal to free cargo outflow from Black Sea ports.

Experts predict that global food inflation should ease once the trade flow in that part of the world is normalized.

“Because we are nearing the conclusion of corn’s second crop harvest, our products should already be well traded; the expectation for export demand remains unchanged,” commented André Nassar, president of Abiove, a grains trading association in Brazil.

He recalled that the market had been pricing the effects of the agreement between Russia and Ukraine, brokered by Turkey and the United Nations (UN), which would allow the resumption of shipments of Ukrainian grain. Therefore, prices had already been adjusted downwards.

On August 1st, consultancy StoneX raised the forecast for corn exports from Brazil in 2021/22 to 42 million tonnes.

Now, the return of shipments can also reduce instabilities in quotations.

“The market will probably be relieved. Ukraine being out of the market was bad because it created a lot of uncertainty and volatility,” it adds.

The president of the Brazilian Association of Animal Protein (ABPA), Ricardo Santin, said that the return of Ukraine to the game might also assist in alleviating speculation regarding grain prices.

On the other hand, he said that the European country will still face difficulties in maintaining the supply, which means that Brazil’s role as a provider of internal and external grain will continue without significant changes.

“We know Ukraine will be unable to supply what it provided (before the war). It is unknown how much it will be able to harvest; there is a loss of people in the country, internal logistical issues, and port challenges,” he said.

Concerning the meat industry’s production expenses – one of the biggest consumers of maize for animal feed – Santin stated that eventual reliefs would be more tied to the harvest of the second Brazilian crop than to the worldwide movement involving Ukraine.

“We will have an abundant corn crop in Brazil,” he added, stressing that there is little possibility for substantial cuts in meat pricing owing to other high production expenses.

See below the track record of Brazilian corn exports from January 2019 to June 2022. The chart below was done using data gathered by Datamar’s business intelligence team in the platform DataLiner.

Corn exports from Brazil | Jan 2019 – Jun 2022 | WTMT

Source: DataLiner (click here to request a demo)

Regarding the global effects of the resumption of Ukrainian shipments, the director of Agribusiness at Itaú BBA, Pedro Fernandes, said that, in general, he expects relief.

“With the food insecurity that we face and the high food prices causing extremely high inflation, this news is welcomed with open arms. It suggests that we are returning to normalcy,” he remarked.

Source: Money Times

To read the full original article, please go to: https://www.moneytimes.com.br/demanda-por-milho-do-brasil-deve-seguir-firme-apesar-de-retomada-de-embarque-da-ucrania/

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