Commodities Shuttle: China reduces grain imports and puts less pressure on prices

In a year in which part of the world’s grain harvest is compromised by drought, China has withdrawn from imports and is expected to buy less soybeans and less corn.

If the Asian country maintained the same pace of imports as in previous years, international commodity prices would be even more heated.

Data from Usda (United States Department of Agriculture) this Wednesday (9) pointed to a crop failure trend in South America, although in a smaller proportion than expected by the market.

According to the US agency, the Chinese will reduce soybean imports to 97 million in this 2021/22 crop, a volume 3% lower than expected last month. In the case of corn, foreign purchases fell from 29 million to 26 million tons.

Corn production and international trade figures may be more adjusted than soybeans, and USDA’s forecasted export data may be overstated.

South America, especially Brazil, depends on normal weather during the harvest. Ukraine, the world’s third-largest grain exporter, is involved in political issues.

A worsening of tensions between the United States and Russia could make it difficult for the product to leave Ukraine. According to Usda, the US exports 61.5 million tons in the 2021/22 harvest, leading world sales. Next come Argentina, with 42 million, and Ukraine, with 33.5 million. For Brazil, the North Americans estimate foreign sales of 32 million tons.

Brazilian soybean exports, even with the crop failure, are expected to reach 90 million tons this harvest, according to Usda. The Brazilian product is more attractive than the other competitors.

In January, the average price of Brazilian soybeans was US$ 547 (R$ 2,833), up US$ 30 (R$ 155) in relation to December. In the same period, the oilseed was readjusted by US$ 41 (R$ 212) and US$ 46 (R$ 238) in Argentina and the United States. The Argentine product was exported for US$ 602 (R$ 3,118) per ton in January, and the American product, for US$ 563 (R$ 2,786).

Inflation Food has returned to an increasing pace at the beginning of February. The rise of this item in the CPI (Consumer Price Index) was 1.4% in the last four weeks, according to Fipe (Foundation Institute for Economic Research).

Beef bovine The United States increased beef imports from Brazil by 260% in December last year, compared to the same month in 2020. The volume was 23,300 tonnes, according to US government data.

Biological The sector moved R$ 1.7 billion in the 2020/21 crop, and has continued increases in Brazil. For Korin Agricultura e Meio Ambiente, the benefits of these inputs can already be seen in all regions of the country.

Agriculture Natural The introduction in Brazil of Bokashi, a Japanese practice of soil recovery and strengthening, through agricultural inputs produced from the fermentation of organic material, allowed the development of natural agriculture, according to the company.

Sustainability It is necessary to search for agrosystems, aiming at food security with productivity, sustainability and soil recovery, says Edson Shiguemoto, Korin’s business director.