Brazil breaks record harvest and exports of Corn
By Frans van Hees | www.AboutBrasil.com | Week 50, December 2015
Rio de Janeiro — With 85.5 million tonnes,
Brazil has a record harvest of corn in 2015. It was expected that the additional supply and demand remains the same, the price on the domestic corn market would decrease.
However, the price on the domestic market rose by 10 percent in one month. Two issues have had an impact on this development.
production of corn in Europe is less than last year and this boosted demand for Brazilian corn.
In addition, Argentina and Uruguay, two major competitors of Brazil, had no surpluses.
Brazilian real depreciated
Another important factor is the exchange rate. Compared with the US dollar, the
Brazilian real depreciated significantly and this makes exporting attractive. Due to the low exchange rate, the exporter receives more reals for dollars and can compete with lower price.
USA as well produced record amount of corn
In recent months,
Brazil even exported corn to the United States, while there has been harvested also a record corn crop.
On 23 October, the price per ton FOB (Free On Board) was US$ 169.29 per ton; in the US on that date it was US$ 182.28. This huge price difference offsets the additional cost of transportation.