After a bright 2019, Brazilian corn prices are set to maintain high levels, sustained by a smaller production forecast and booming demand, according to data from consultancies and official estimates. While this is good news for Brazilian agro, smaller supply may have serious impacts on the internal market, affecting the price of products such as meat—which has already suffered significant hikes in recent weeks.
In its latest report, the Brazilian Institute of Geography and Statistics (IBGE), pegged the country’s grain harvest in 2020 at 240.9 million tonnes, the biggest since records began in 1975. However, IBGE sees corn production falling 7.5 percent in comparison to 2019 levels, dropping to 92.7 million tonnes. The culprit is the year’s second corn harvest, which accounts for nearly three-quarters of the total national production. IBGE estimates have it shrinking 9.8 percent, to 67 million tonnes.
According to Ana Luiza Lodi, a market specialist at consultancy INTL FCStone, the smaller production may be connected to delays in soy planting, which pushed back the second corn harvest. “We expect a smaller production, at 98.76 million tonnes, but not a steep fall. Delaying the planting of the second harvest is always concerning, as it happens in the dry period and the lack of rain may cause damages, but at the moment we aren’t seeing it,” she told The Brazilian Report.
Big Agro to suffer from 2019 shockwaves
While production may shrink somewhat from the 100 million tonnes expected for 2019, consumption rages on. According to the National Association of Cereals Exporters (ANEC), Brazilian corn exports doubled from January to November, versus the same period in...
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