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September 5, 2013

Brazil Expects to Start Exporting Corn to China in 2013/14

Brazilian agricultural officials have been working with their Chinese counterparts to establish a protocol for Brazil to start exporting corn to China. They are confident that everything will be place for Brazil to start exporting corn by the time the 2013/14 corn crop is harvested in Brazil early next year or maybe even sooner.

China has stated that they wish to be as self-sufficient as possible in corn production, but they have not been able to increase domestic production fast enough to keep up with demand. China was a net corn exporter up until a few years ago, but they are now slowly increasing corn imports. China imported 3 million tons of corn in 2012/13 and the USDA is estimating that they will import 7 million tons of corn in 2013/14. Up until now, virtually all of their corn imports have come from the United States, but that appears to be changing.

As with the importation of other commodities, China is striving to source these products from a variety of countries in order to reduce their risk of relying too heavily on one supplier. They have recently established a protocol to import corn from Argentina and now they are in the process of doing the same in Brazil. The first shipments of Argentine corn occurred in August and Brazil may start exporting corn to China as soon as the end of 2013.

The main thrust of Brazil's efforts is to establish a phytosanitary agreement in which all the various corn diseases and pests in Brazil are described and discussed in order to insure they do not pose a risk to the huge Chinese corn crop, which is approximately 200 million tons per year. Since Brazil already has in place similar agreements with neighboring Japan and South Korea, no problems are expected with this process other than the regular bureaucratic steps.

Brazil has increased its corn production 60% over the past decade reaching a record level of 80 million tons during the 2012/13 growing season. Establishing exports to China will be a gradual process and the Brazilian Minister of Agriculture expects only 3 to 4 million tons of corn to be exported to China by 2014/15. Brazil's total corn exports reached a record 20 million tons in 2012 thanks to a severe drought in the U.S.