South America Calling

China finally approved imports of Brazilian corn on March 31, five months after it had initially announced it would open its doors.

The announcement comes as China looks to increase its corn importing options beyond the U.S., which last season accounted for 91% of shipments to the Middle Kingdom.

Last year, China also approved imports from Argentina.

The precise level of demand for Brazilian corn is, as yet, unknown.

In 2014-15, the U.S. Department of Agriculture estimates China will import just 3 million metric tons (mmt) of corn.

"This year, Brazil is unlikely to send much corn to China," said Anderson Galvao of Celeres, a local farm consultancy.

But shipments could grow quickly over the next decade, if Chinese corn demand rises as quickly as some analysts are predicting.

Eventually, Brazil could export 10 mmt of corn to China every year, the local government predicts.

Brazil will have to increase output to meet that demand, producing more second-crop corn after soybeans.

"With the passing of time, farmers are getting better at double cropping and investing more in it. The second crop is now an important part of profit projections for growers," said Galvao.

This season, Brazil will produce 78.4 mmt of corn, down 6% on the year before, according to Celeres.

It predicts shipments will total 27 mmt in 2014, slightly higher than the 26.6 mmt sent last year. The figure is significantly higher than the consensus of around 18 to 20 mmt.

The corn will go to Brazil's traditional clients, including South Korea, Mexico and Iran.

This season, the U.S. has suffered with the rejection of corn shipments by China because of the presence of Viptera and Duracade genetically engineered traits. This promises to be a problem here also, as the same products are employed on Brazilian farms and segregation protocols can leave much to be desired.

(AG)

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