October 4, 2012

China and South Korea Main Destinations of Mato Grosso's Grain

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The severe drought in the U.S. and the subsequent reduced supply of U.S. corn and soybeans, has forced importing countries to source more of their needed grain supplies from Brazil. According to the Mato Grosso Institute of Agricultural Economics (Imea), during the January to August period, the amount of soybeans exported out of the state that was destined for China surpassed that of 2009, 2010, and 2011 by 25%, 26%, and 10% respectively. Through the end of August 2012, 6.6 million tons of soybeans had left the state destined for China, which was 67% of the total soybean exports from the state.

China is by far the number one destination for Brazilian soybeans and that trend is expected to continue in 2012/13 as Brazilian farmers increase their soybean acreage by 8% or more. The total Brazilian soybean production is expected to set a new record in 2012/13 at over 80 million tons.

Brazil is also destined to export a record amount of corn in 2012 as well. During the month of August, Brazil exported 2.76 million tons of corn, which was a one-month record for the country. Approximately half of Brazil's corn exports during August came from the state of Mato Grosso with 19% coming from the state of Parana.

The number one destination for the Mato Grosso corn is South Korea, which has increased its imports of Mato Grosso corn by 23% in recent years. The corn is used in South Korea primarily to feed chickens.

The farmers in Mato Grosso produced a record large safrinha corn crop of 15 million tons in 2012. An estimated 80% to 90% of the state's corn production is expected to be exported to livestock producers in other parts of Brazil or to overseas buyers.