Rechercher dans ce blog

Friday, October 23, 2020

Has Brazil become a new customer for U.S. corn and soy exporters? - Hellenic Shipping News Worldwide

ersa.indah.link

It is no surprise that Brazil is nearly out of soybeans given its extraordinary export pace earlier this year, but consistent with the bizarre nature of 2020, it is possible that Brazil could purchase beans from its export rival, the United States.

That has never happened in modern times, especially since Brazil emerged last decade as the world’s top exporter of the oilseed. But neither U.S. nor Brazilian agencies seem to think Brazil will start importing U.S. soybeans, at least in the short term.

Brazil’s government over the weekend announced the temporary suspension of the 8% import tariffs on corn and soybeans from outside the Mercosur trade bloc to help reduce food prices that are pushing up inflation.

Industry analysts and agencies like the U.S. Department of Agriculture and Brazil’s Conab see various hurdles that would need to be cleared for U.S. corn and soybeans to begin filling Brazil’s supply gaps. But if the United States is an unlikely supplier, then it is unclear at which country or countries the tariff suspension was aimed.

Brazil does not import much corn compared with what it produces and exports, and it brings in even fewer soybeans. But it has been more than 20 years since it has imported corn and soybeans from outside the continent, and virtually all the volume since has come from Mercosur countries, which include Argentina, Paraguay and Uruguay.

High feed prices have hurt profit margins for Brazil’s prominent poultry and pork sectors, prompting the industry association to request the tariff elimination to offset rising feed costs. Soybean meal and corn account for 70% of pork and chicken output costs.

Conab notes the United States is the only non-Mercosur country with the capacity to export soybeans to Brazil at competitive prices, but analysis by USDA suggests that U.S. export prices and ocean freight costs may still be prohibitive.

USDA also makes a couple more points, including the fact that there are several varieties of genetically modified corn and soybeans grown in the United States that are not approved in Brazil. This would require a special application process for imports, and USDA seems to suggest it may not be quick.

USDA also says that Brazil’s grain and oilseed terminals are set up for exports and not imports, and that making the switch would be costly and time-consuming. Transporting the soybeans to crush facilities that are largely in the country’s interior is another expense to consider.

Brazil’s soybean supply should start coming online in about three months, so by the time all these special arrangements were made and considering shipping times and costs, buying U.S. soybeans may not make sense right now. The tariff suspension is set to expire on Jan. 15, 2021.

CORN MORE LIKELY?

The biotech limitation also applies to corn, though that tariff-free period runs through March 31, 2021. The Ministry of Economy reportedly considered dropping the corn tariffs through June 2021, but the Ministry of Agriculture was opposed.

However, since Brazil’s larger second corn harvest will not be available until June, there could be an increased need to fill supply holes between now and then. Market participants already have been noting potential risks to next year’s second corn crop since soybean planting is on its slowest pace in a decade.

Late soybean planting usually means that second corn is planted later than desired, running the risk of damage at the onset of Brazil’s dry season. It is still too early to be certain, but that scenario has recently played out.

Brazil harvested a bumper corn crop in 2015 and its historically weak currency later that year encouraged farmers to sell and exporters to aggressively ship away all the corn. Soybean planting was delayed by dry weather in 2015 and the 2016 corn crop was pushed into the dry season, which was exceptionally bad that year.

Second corn yields were terrible and Brazil was left with a huge supply gap, prompting its 2016 corn imports to hit 2.9 million tonnes, the most since at least 1997. Half came from Paraguay and the other half from Argentina.

On average over the last five calendar years, Brazil has imported 258,221 tonnes of soybeans annually and 1.4 million tonnes of corn. Paraguay supplied 96% of the soybeans and 67% of the corn.

That compares with average exports during the same period of 66 million tonnes of soybeans and 29 million tonnes of corn.

Those trade statistics come from Brazil’s official record database, but it is well known that undocumented grain and oilseed trade is prominent among South American countries in order to avoid duties. Industry sources suggest these volumes could be quite significant, and this black-market trade could be a barrier in estimating true import needs.
Source: Reuters (Editing by Matthew Lewis)

The Link Lonk


October 24, 2020 at 01:00AM
https://ift.tt/2FUBFut

Has Brazil become a new customer for U.S. corn and soy exporters? - Hellenic Shipping News Worldwide

https://ift.tt/3gguREe
Corn

No comments:

Post a Comment

Featured Post

Dry conditions decrease Brazilian corn production estimate - World Grain

ersa.indah.link BRASILIA, BRAZIL — Delayed planting and continued dry conditions has dropped Brazil’s estimated corn production 11 million...

Popular Posts