Brazil moves closer to corn exports to China

According to a Brazilian agriculture authority, Chinese customs updated its list of approved Brazilian corn exporters on Wednesday, November 2, a move that could boost Brazilian corn sales to China.

The approvals could reshape global trade flows and result in fewer sales to producers in the United States, the world’s top corn supplier.

China used to depend on the United States and Ukraine for most of its corn supply, but Russia’s invasion of Ukraine has affected exports.

“It is a good alternative for Brazil to have these markets to put our product into,” said Glauco Bertoldo, director of the inspection department for products of vegetable origin at Brazil’s Ministry of Agriculture.

He said in an interview that the list of Brazilian facilities approved to export corn to China might be updated to include more units in the coming weeks.

The new list on China’s General Administration of Customs website included 136 corn export facilities, Bertoldo said, including facilities of Archer-Daniels-Midland Co, Bunge Ltd, Cargill, Louis Dreyfus Company, and Cofco International.

Cofco declined to comment. The other exporters did not respond to requests for comment at first.

Bertoldo said that Brazil has also sent Beijing a list of facilities approved to export soy meal, which Chinese customs authorities have not yet published.

Once China starts buying corn from Brazil, traditional importers of Brazilian corn, such as Spain and Egypt, may shift some of their purchases to the United States.

Minimal imports by China from Brazil may begin soon, but large shipments are not expected until the next Brazilian harvest starts in early 2023, said Craig Turner, grain broker at StoneX.

Beijing and Brasilia signed a protocol for exporting corn from Brazil to China in 2014, but little trade has happened because of complex inspection requirements.

The countries agreed to a revised protocol during negotiations in May, just months after Russia invaded Ukraine in February.

According to the Ministry of Agriculture, China is expected to import 18 million tons of corn in the 2022/23 crop year that began in October.

China’s imports from Ukraine fell to less than 2,000 tons in September this year, leaving it dependent on the U.S. for the bulk of its foreign supplies.

With information from Reuters