China promotes corn imports from Brazil, and trades rumoured

China's General Administration of Customs (GACC) and Brazil's Ministry of Agriculture have signed a Protocol on Phytosanitary Requirements of Brazilian Corn Export to China, according to an official statement from China's commercial ministry released Tuesday.

At the same time, it was rumoured that China's state-owned enterprise bought around 250,000 to 400,000 mt of corn from Brazil for September/October shipment, and more volumes were heard booking in recent days, trading sources told Agricensus.

The protocol swept away the last obstacle for the world's major corn buyer enabling it to import the grain from the largest producer in South America, and broadening its ability to diversify its grain imports after corn supply from Ukraine was disrupted by war.

"Even if Brazil and Argentina increase their exports to their limits, there is no way to make up for the loss of Ukraine's corn exports," a China-based analyst told Agricensus.

China had claimed that Brazilian corn obtained the inspection and quarantine qualification for export to China on March 31, 2014, according to the country's General Administration of Quality Supervision, Inspection and Quarantine of The People's Republic of China (AQSIQ).

However, US and Ukraine remained the two most prominent origins, and no volume was brought from Brazil over the past nine years.

China has traditionally imported Ukrainian corn for March, April and May shipments to cover its demand before its own harvest.

The Russian invasion curtailed Ukraine's grain exports, with the country's major ports blockaded and some export hubs suffering severe damage since early February this year.

Moreover, corn production in Ukraine for the next marketing year was expected to be lower due to the impact of the war, which would exacerbate the tightness of global corn supplies and push China to pursue alternative import origins.

On the producer side, on a joint note published late Monday, Brazil’s Ministry of Foreign Affairs and the Ministry of Agriculture, announced the conclusion of negotiations for the beginning of Brazilian exports of corn to China.

The next step will be the qualification of the exporting establishments.

The country’s food agency Conab forecasts Brazilian corn exports at  38 million mt in 2022, an 82.6% increase on the year.

In 2020/21 drought reduced the country’s availability of corn to export and the shipments reached 20.8 million mt.

Both countries also plan to sign the protocols related to Brazilian exports of soymeal and concentrated soy protein, at the next meeting of the Sub-Committee on Inspection and Quarantine, to be held on a date to be defined, in the period from June 21 to 24, 2022.