CHINA – The world’s biggest corn buyer China has developed a new appetite for Brazilian corn as part of efforts to diversify away from its traditional suppliers Ukraine and the United States.

Brazil is the world’s second-largest exporter of corn, but China has bought almost none in the past 9 years due to phytosanitary concerns.

To bring the stalemate to an end, the parties agreed on sanitary guidelines in 2022 after years of negotiations, paving the way for procurement.

The diversification comes at a time when the war in Ukraine has disrupted trade and tensions with its largest trade partner, the US, are high.

A more than 20% rise in Chicago corn futures in less than three months, coupled with a sharp rise in the US dollar, has further intensified the need for China to find alternative cargoes.

About 45 enterprises belonging to the world’s leading companies (Bunge, Cargill, Archer-Daniels-Midland) received preliminary approval to export from Brazil to China, according to the Ukrainian daily LandLord.

A list of companies for which Brazil will approve corn exports to China is likely to be made available in November.

Once Beijing approves the list, these companies will negotiate directly with buyers in the PRC, LandLord reported.

China, the world’s most populous country, is also restricting exports of cornstarch in a sign that the country is concerned about domestic supplies.

Brazil’s corn exports jump 93% in 2022

As the Chinese market starts to warm up to Brazilian corn, demand from other regions has been exceptionally high, particularly in the first 9 months of 2022.

According to a report by the Logistics Bulletin, the South American country exported 24.66 million tons of maize between January and September 2022, a 92.3% increase when compared with the same period last year.

The report noted that the strong growth in Brazilian exports was driven by the rise in international prices, as well as the fall in world production of the cereal.

Meanwhile, the United States Department of Agriculture (USDA) expects global corn production to drop in 2022 due to poor crop conditions.

The agency forecasts 1,168.7 million tons of corn will be produced during the 2022/2023 harvest, a decrease in the estimate of 48.6 million tons (-4%), compared to 1,217. 3 million tons were produced in the previous campaign.

Previously, the USDA had already reduced its production estimate between July and August by 6.3 million tons, and between August and September, by 7 million.

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