Domestic corn demand has not been affected by a decline in Brazil’s meat exports, as a real increase in incomes has led to increased meat consumption within Brazil. Add to that a drastic decline in corn imports from Paraguay, and Brazil is facing one of the lowest corn carryover rates in recent history.
“All this has kept prices much higher,” said Navarro. “As a result we are seeing a significant increase in farmers’ capital for investing in the next summer crop.”
Corn prices in central and southern Brazil were even higher this June and July than in 2008, a situation that typically triggers increased corn acreage in the following season.
Navarro pointed to a significant change in Brazilian cropping patterns over the past decade as corn plantings increase in Brazil’s winter season and decrease in the summer, giving up area to soybeans.
Another change is the growing adoption of genetically modified corn from 1.5% of Brazil’s planted acres in the summer of 2008-09 to 50.2% by the summer of 2010-11.
Exports for June, initially projected at 1 million tonnes (39.4 million bushels), ultimately totaled just 271,000 tonnes (10.7 million bushels), Navarro said.
The sharp drop is attributed to three factors: delays in harvest, high freight costs and long waiting lines that produced a shortage of berths at Brazil’s ports.
Navarro now expects Brazil’s August shipments could total as much as 1.85 million tonnes (72.9 million bushels) as shipments catch up. That would set a new monthly record.
Brazil’s corn exports over the past decade have varied from as low as 1 million tonnes (39.4 million bushels) in 2005 to a high of 10.9 million tonnes (429.5 million bushels) in 2007.
Based on January-to-July shipments, Brazil’s top export customers this year are Iran, Spain, Netherlands, Malaysia, Algeria, Morocco, Colombia, Indonesia, Portugal and Vietnam.