A Brazil Cargill executive estimated on Thursday that the country will have exported 5 million tonnes of corn in August, with the U.S.-based agriculture firm accounting for a large share of the trade.
Brazil is expected to account for 50 percent of global corn exports between this August and January next year, Paulo Sousa, the head of Cargill’s local grains and oilseeds unit, told an industry conference.
“Cargill will be the leader,” he said in relation to the company’s ratio of Brazil’s August corn exports, declining to elaborate. The company has operated in the country for 52 years.
Brazil’s prominence as a corn exporter in the second half of the year is due to winter corn, which is planted between February and March, and harvested between July and August.
“With Brazilian corn prices at 15-25 cents per bushel, the country originates the cheapest corn in the world and will continue to do so until April or May of next year,” he said.
A second annual corn crop, planted after soybeans are harvested, has made Brazil the world’s second-largest exporter of the cereal and a major competitor to the United States in global markets.
The second corn harvest represents about 68 percent of Brazil’s total corn crop, which this year is estimated at roughly 97 million tonnes, according to government data.
“But winter corn is a lot more vulnerable to climate risks, so price volatility tends to be a constant issue,” Cargill’s Sousa said.
Last year, he said to illustrate his point, there was a steep fall in Brazil’s corn production due to weather factors affecting winter corn planting in the first quarter. Because a significant portion of the winter corn had been traded by farmers in advance for the export markets, there was a problem on the supply side.
“The price went up so much that it allowed exporters like Cargill and competitors to buy back what they had sold,” he said, adding this was done to cover the production gap and cater to domestic demand. Not all of the exported corn could be bought back, he said.
Domestic demand is estimated at about 60 million tonnes while Brazil is expected to export 35 million tonnes of corn this year, according to the executive.