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August 11, 2016

Brasil Trying to clear way to Import 1.5 Million Tons of U.S. corn

Due to very tight corn supplies in Brazil, the Brazilian government is looking at ways to allow the importation of 1.5 million tons of U.S. corn. Currently, many GMO corn hybrids grown in the U.S. is prohibited from entering Brazil.

According to Neri Geller, an undersecretary from the Ministry of Agriculture, technicians from the Ministry are going to meet with staff from the National Biosecurity Technical Commission (CTNBio) to discuss the importation of GMO corn from the U.S. The CTNBio has the final say on the approval of GMO products. One idea being discussed is that the imported corn must only be used for animal rations and it cannot be used for human consumption or for planting.

If U.S. corn is eventually allowed into Brazil, it would be exempt from the traditional 10% tariff on grain coming into Brazil from countries outside of the Mercosul trading block. Any U.S. corn exports to Brazil would occur over the next 4-6 months.

Domestic corn prices in Brazil are already nearing record highs with prices in some areas of the country approaching $7.00 per bushel. It will be necessary to import corn from Argentina, Paraguay, and the United States if there is any hope of pressuring corn prices lower.

Deller feels that Brazilian farmers will plant more full-season corn over the next few months in response to the very high corn price. He is hopeful that a combination of more full-season corn acreage, improved weather, and hefty imports will help to ease the very tight corn situation by early in 2017. The first official estimate of the 2016/17 full-season corn acreage and production will be released in Conab's October Crop Report which will be issued October 9th.