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November 16, 2016

Brazil May Import only a Small Amount of U.S. Corn

Due to an ongoing shortage of corn in Brazil, livestock producers in southern Brazil have been importing corn from Argentina and Paraguay since early in 2016 in order to keep their operations running. There has also been speculation that some of the imported corn would come from the United States. The way it looks now, there may only be a small amount of U.S. corn imported into Brazil.

In April of this year, the Brazilian government waived the 8% tariff imposed on grain imported from non-Mercosul countries as a way to facilitate corn imports. The waiver will remain in effect until December 31st. According to the Brazilian Ministry of Industry and Commerce (Mdic), there have not yet been any corn importers requesting the tariff wavier. It does not mean there will not be any request going forward, but the wavier is only good for another month and a half. Bloomberg reported last week that the three largest poultry and hog producers in Brazil, JBS, BRF, and the Aurora Cooperative, were joining together to import two shipments of U.S. corn totaling 60,000 tons, but Mdic has not yet received a waiver request.

As a way to encourage U.S. imports, another impediment to U.S. corn going into Brazil was eliminated in early October when the Brazilian National Technical Commission on Biosecurity (CTNBio) authorized three more GMO hybrids grown in the U.S. to be imported into Brazil for the purpose of producing animal rations.

Importers say it is difficult to justify importing corn from the U.S. due to the cost of port services, logistical costs, and paying for freight to transport the corn into the interior of Brazil. During the first ten months of 2016, Brazil imported 1.91 million tons of corn which was a 600% increase over the previous year. The vast majority of the corn came from Paraguay and Argentina.