BRAZIL- Brazil is set to overtake the U.S. this year as the world’s top corn exporter, reflecting both a bumper harvest and logistical breakthroughs such as the consolidation of northern export routes.
According to a report by Reuters, corn exports through Brazil’s northern ports, which use the waterways of the Amazon River basin to ship grains globally, are on track to beat volumes via the most traditional port of Santos for a third consecutive year.
The shift underscores how Brazil is finally overcoming some of the infrastructure bottlenecks that have long made it hard to get its bountiful harvests to global markets.
Additionally, a new supply deal with China announced last year suggests Brazil may be opening a longer era of supremacy over U.S. corn exports.
China’s corn imports have soared more than twentyfold since 2010, driven largely by its skyrocketing livestock feed needs.
In February, China’s corn imports rose 38% from the previous month and were up 60% from a year earlier, mainly from the US, Ukraine, and Brazil.
Additionally, Chinese state-owned trader COFCO is now building a new grains terminal at Santos after getting a 25-year license to operate a unit with a capacity of 14 million tons.
The improved export capacity helped Brazil to fill gaps in the global corn market amid disruptions from the war in major grain exporter Ukraine and trade tensions between the U.S. and China.
“We celebrated a lot… when (corn export) volumes via northern ports equaled Santos,” said Sergio Mendes, head of Brazilian grain exporter group Anec. “By using northern ports, you are saving 20 reais (US$4.12) per ton (of corn).”
Moreover, major new investments in Brazil have begun to ease several chokepoints and bring down logistics costs sharply, helping to undercut U.S. farmers.
Northern export routes, in particular, have benefited from a 2013 law that encouraged grains traders such as Cargill and Bunge, and barge operator Hidrovias do Brasil, to build out new private-use port terminals (TUPs).
In the No. 1 grains state of Mato Grosso, the storage gap had surged to 46 million metric tons, according to state government data through 2021, after the annual corn harvest tripled in a decade to over 90 million tons, faster than new silos could be built.
Therefore, a lack of storage space means Brazilian farmers are forced to quickly sell their harvests or pile their corn outside warehouses and hope for good weather.
As a result, much of the Brazil harvest crowds onto the roads during a narrow seasonal window, which can make for expensive traffic jams.
Brazil’s surging export infrastructure shows little sign of letting up, even though lower prices may discourage farmers from expanding plantings as rapidly.