Brazil can already start supplying corn to China, which will reduce exports from Ukraine and the USA

After a long negotiation, Brazilian exporters received permission from Chinese customs to supply corn to the country, which will negatively affect the export of corn from Ukraine and the United States, which have traditionally been the main suppliers of grain to the PRC.

According to Reuters, Chinese customs yesterday updated the list of approved Brazilian corn exporters, which includes 136 entities, including those owned by ADM, Bunge, Cargill, Louis Dreyfus and Cofco International. This means that Brazil can already supply corn to China.

China has long imported corn from the United States and Ukraine, although a protocol on the export of corn from Brazil was signed back in 2014, but trade was limited by strict inspection requirements. Ukraine, which used to be the main supplier of corn to China, sharply reduced its exports after the Russian invasion. Therefore, in May, China and Brazil revised the protocol, which will allow China to import 18 million tons of corn in the 2022/23 FY (which began in October). In September, corn supplies from Ukraine to China decreased to 2,000 tons, which increased China's dependence on the United States and forced the search for alternative suppliers to accelerate.

In 2021/22 FY, the corn harvest in Brazil will reach 116 million tons, of which 44-45 million tons will be exported. Experts of the StoneX Group agency, against the background of the expansion of sowing areas, increased the forecast of corn production in the country in 2022/23 MR by 3.6 million tons to 129.9 million tons, which exceeds the USDA's October estimate of 126 million tons. As of October 27, corn of the first harvest in Brazil, 56% have been sown compared to 63% last year, AgRural reports.

March corn futures on the Paris exchange yesterday fell 2.4% to €336.5/t or $330.3/t, while December futures in Chicago fell 1.5% to 270.7 $/t, which corresponds to the level of last month.