China is expected to import more corn from Brazil, about 18 million tons by China in 2022/23. The data was released in the latest report by the U.S. Department of Agriculture (USDA) attaché in Beijing.

With news of the report, corn futures traded in the United States jumped on Thursday, 26.  The most active corn contract on the Chicago Stock Exchange (CBOT) – due in March – gained 7.75 cents to $6.8250 per bushel. Corn export sales totaled 925,900 tons in the week ended January 19, in line with market expectations.

According to the USDA attaché, Brazilian corn that was approved for shipment at the end of last year began to arrive in the Chinese market with competitive prices in relation to china's production.

The Chinese currently hold contracts of 3.7 million tons of corn with the U.S. for delivery in 2022/23, 70% less than in the same period last year. The scenario intensifies competition between Americans and Brazilians.

"With the arrival of the first Brazilian corn ship in early January 2023, China is likely to turn to Brazil for a substantial amount of its corn imports," the USDA attaché said.

Exports grow in Brazil

Brazil should have a total capacity to export between 40 million and 50 million tons of corn in the 2022/23 cycle. According to the USDA, China has agreed to make a phytosanitary agreement with Brazilians to allow cereal entry, in part, to reduce dependence on U.S. supply and replace supplies from Ukraine, which were cut during the war.

"In October, China approved more than 130 Brazilian facilities for export. Industry sources reported that about 2 million tons of Brazilian corn were expected to ship to China as of November 4, 2022," the USDA attaché said.

More than 900,000 tons were loaded in mid-December and were on their way with additional shipments expected in the first months of 2023.

Brazil is expected to export 5.2 million tons of corn in January, a record for the first month of the year, with additional demand from China, according to data from the National Association of Cereal Exporters (Anec), as reported by Reuters.

China was the destination of 1.165 million tons of corn from Brazil in 2022, with almost all shipped in December, representing 18% of the total exported by the country last month, after the Chinese made purchases in the face of confirmation of the release of their market to Brazilian cereal.

With information from Reuters

Source: RPA news