Shuttle: South America supports world demand for corn

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South America will balance the world corn market in the 22/23 harvest. North America, on the other hand, puts less cereal on the market this year than in the previous season.

For the USDA (United States Department of Agriculture), South American producers will produce 194 million tons of cereal, with an advance of 8% compared to the volume of 2021/22.

The USDA considers the harvest period from October of one year to September of the other. In the department’s calculations, the North Americans produce 7% less in this harvest, which retreats to 396 million.

The European Union also produces less, with the crop falling to 54 million tons. Asia maintains the 326 million of the previous crop.

The numbers show the importance of Brazil in exports in 2022/23. In the evaluation of the USDA, the country will place 46.5 million tons of cereal on the foreign market in this period.

With this, Brazilians consolidate themselves as the second largest exporter in the world, below the 55 million of the United States.

Large producers place less cereal on the market due to a drop in productivity caused by adverse weather conditions. Many of the countries have already suffered the effects of the climate, which caused this drop in production.

The danger for Brazil is that the big crop will still occur in the winter period of next year, and the country is subject to eventual climatic effects. The estimated production for 2022/23 is 126 million tons.

This year’s, which allowed a better supply of the international market, was a record and reached 116 million tons.

In the 2022/23 harvest, China, which also had a loss of productivity in some regions of the country, should import 18 million tons, a value close to that of Mexico, but below the 22 million of the European Union.

With still heated demand and the drop in production in several large producers, the total corn supply retreats to 1.16 billion tons, a drop of 5%. World ending stocks returned to 298 million, down 3% over the previous period.

The global fall in the corn crop kept domestic prices warm. In May of last year, a bag of corn was traded at R$101, according to Cepea.

In July, with the greater offer coming from the off-season, the price of the bag dropped to R$ 82. The growth of exports raised internal prices, which are at R$ 88 in the region of Campinas. The value of a ton of corn exported this month is 35% higher than that of the same period last year.

indebtedness Climatic adversities, pandemic, geopolitical conflicts and ways of managing businesses can contribute to increased indebtedness in the countryside.

Debt 2 A survey by Obre (Brazilian Observatory for Extrajudicial Recovery), by Biolchi Empresarial, shows that extrajudicial recoveries from 2019 to 2022 include six cases of companies linked to agribusiness, out of a total of 46. The agreements add up to R$ 1.2 billion in the sector .

Agreement Extrajudicial recovery is an agreement between debtor and creditors, with the aim of changing the original debt payment conditions. The modality has grown in recent years, mainly as a result of the pandemic and the economic crisis, according to Juliana Biolchi, director of the company.

It costs less Extrajudicial recovery has become an attractive tool because the negotiation is done before reaching the Judiciary. It is more surgical, because it does not need to include all creditors, and it tends to cost less, in the director’s assessment.

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