Hebei Lansheng Biotech Co., Ltd. ShangHai Yuelian Biotech Co., Ltd.

Brazil may need to import corn, soybeans, soy meal, and cottonqrcode

Sep. 1, 2016

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Sep. 1, 2016
The agricultural situation in Brazil has taken a very unusual turn in 2016. Brazil of course is a major commodity exporter and the major competitor of the United States, but the unusual thing this year is that Brazil will need to import corn and they may also need to import soybeans, soybean meal, and cotton as well.
The reasons for importing commodities can be attributed to currency exchange rate and adverse weather during the 2015/16 growing season. In August of 2015, the Brazilian currency had weakened to about 4.2 Brazilian reals per dollar (it has since strengthened to about 3.2 to the dollar). The weaker currency made Brazilian commodities very competitive in the international market and exporters heavily booked exports even before any of the 2015/16 crops had been planted. Unfortunately, the weather during the 2015/16 growing season turned hot and dry in many areas of Brazil and the 2015/16 crop production turned out to be very disappointing.
The crop impacted the most by the adverse weather was the safrinha corn crop which turned out to be a disaster. Brazil had to import corn in early 2016 due to the over booking of corn exports and the situation now is even worse. The estimates for the 2016 safrinha corn crop continue to decline and Brazil will need to immediately start importing corn. In fact, the first shipment of imported corn from Argentina arrived in Brazil last week. Those imports will come from Argentina, Paraguay, and the United States. The total amount of corn that needs to be imported is yet to be determined, but the Brazilian Minister of Agriculture has already set in motion emergency measures that would allow up to 1.5 million tons of previously prohibited GMO corn from the United States to enter Brazil.
The 2015/16 soybean crop in Brazil was disappointing as well and front loading of Brazilian soybean exports is also resulting in tight domestic supplies of soybeans. The Brazilian government has already indicated that soybean imports may be needed to keep Brazil's crushing industry operating until new soybean supplies are available early in 2017. Poultry and hog producers in the state of Espirto Santo are already importing corn and they have indicated they may start importing soybean meal as well.
The 2015/16 cotton crop in Brazil was also impacted by the adverse weather especially in the two most important cotton producing states of Mato Grosso and Bahia. Cotton exports were also over booked and domestic mills in Brazil have already started inquiring about potential cotton imports from the United States.


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