The demand for corn from Brazil should remain firm this year, even in the face of the possibility of resumption of shipments from Ukraine, one of the main global suppliers of the cereal and a competitor of Brazilians in exports, in the assessment of industry members and analysts interviewed by Reuters.
A first ship with corn since the Russian invasion of Ukraine left the port of Odessa heading to Lebanon on Monday as part of an agreement to unlock Black Sea ports.
The main effect of the Ukrainian movement will come in the form of relief for global food inflation, according to experts.
“Our corn should already be well traded, because we are going towards the end of the safrinha harvest, the outlook for export demand does not change now,” said André Nassar, president of the association that represents grain trading companies and soybean processors, to Abiove.
He recalled that the market had been pricing in recent days the closing of an agreement between Russia and Ukraine, brokered by Turkey and the United Nations, which would allow the resumption of shipments of Ukrainian grain, so prices have already been adjusting downwards.
This Monday, consultancy StoneX raised the forecast for corn demand in Brazil in 2021/22 to 42 million tons.
Now, the return of shipments can also reduce instabilities in quotations.
“I think the market will be relieved. Ukraine being out of the market was bad because it created a lot of uncertainty, a lot of volatility,” she added.
The president of the Brazilian Association of Animal Protein, Ricardo Santin, said that the Ukrainian recovery also helps to reduce speculation about corn prices.
On the other hand, he said that the European country will still face difficulties to continue with the supply, which means that Brazil's role as a provider of internal and external cereal supply continues without major changes.
“We know that Ukraine will not be able to supply what it supplied (before the war). It is not known how much it will be able to extract from the field, there is the loss of manpower in the country, internal logistics, problems in the ports”, he commented.
Regarding the production costs of the meat industry, one of the main consumers of corn for animal feed, Santin said that eventual reliefs will be more related to the harvest of the second Brazilian crop than to the global movement involving Ukraine.
“We will have an abundant corn crop in Brazil,” he said.
Noting, however, that there is no room for large drops in meat prices due to other production costs that remain high.
Regarding the global effects of the resumption of Ukrainian shipments, the director of Agribusiness at Itaú BBA, Pedro Fernandes, said that, in general, there will be relief.
"With the moment of food insecurity that we live and the high price of food also generating very high inflation, this news comes to calm down, it indicates that we are going to normality", he said.
“The assessment that we can have is that the agricultural production of this crop, both from Ukraine and Russia, comes to the market, it is certainly positive from the point of view of greater product availability at a time of great scarcity” , he added.
Sources: investing.com
