São Paulo – If the second crop of Brazil’s record maize crop is confirmed, the country may significantly increase its sales of the commodity this year. The National Food Supply Company (Conab) estimates sales of 10.5 million tonnes and 11 million in 2012, against 9.5 million last year. Perspectives for international prices, however, are not good.
Conab forecasts a second maize crop of 32.8 million tonnes, to be added to the 34.8 million tonnes of the first crop, resulting in 67.7 million tonnes in the 2011/2012 period. The increase as against the previous crop’s 57.4 million tonnes should be 18%, resulting in a record crop.
To the market analyst at Conab, Thomé Guth, the growth in the area cultivated and the climate are the main factors for the expansion. The climate affected the first crop in Rio Grande do Sul, but it did not result in problems elsewhere and should favour the second crop. The sowing of the second crop is normally right after the harvesting of the summer crop, in the first quarter, and it takes place simultaneously with soy.
Guth stated that a significant share of the second crop was sold in advance and that there is a great tendency for export in the second half. Other analysts are more optimistic and forecast record exports. Guth believes that sales should not be affected by competition with Argentina and the United States, as the Brazilian crop takes place between that of the other countries. “It may coincide with part of the US crop,” said the Conab analyst.
The United States should also have a large maize crop and should start putting its product on the market in October. Most of Brazil’s maize exports, according to Guth, are from July to September. Added to this, Brazilian maize in the second crop is presenting good quality, according to the analyst, as up to now it has not rained during the harvesting period.
He recalls that Brazil has won new markets like Japan, which had been importing maize from other countries over the last three years. Arab countries have also been buying more of the Brazilian product in recent years. Last year, revenues with sales to the region totalled US$ 679.5 million, against US$ 556 million in the previous year, according to figures disclosed by the Ministry of Development, Industry and Foreign Trade.
Maize prices, however, should not show themselves too rewarding to farmers and should be below the minimum price, according to Guth. In Mato Grosso, for example, each bag was traded for R$ 20 (US$ 10) early this year and has now dropped to R$ 13.50 (US$ 6.50). The analyst stated that in the excellent conjecture of the North American crop, Brazil with a perspective of a record crop and Europe in crisis, the tendency is for lower prices. "Prices tend to fall more,” he said.
*Translated by Mark Ament
