On May 23, China and Brazil announced that they had signed a Protocol on Phytosanitary Requirements which would allow for the export of Brazilian corn to China. According to available information, before trade can begin, export establishments must first be registered with China’s government.
However, should trade in large quantities commence it could reshape global corn trade flows. In 2020/21 (Oct- Sep), China imported nearly 30 million tons of corn; nearly 70 percent was imported from the United States and most of the remainder from Ukraine.
In March 2022, the most recent month of published data, Ukraine exported just 1.1 million tons of corn, with about 400,000 tons going to China. In comparison, corn exports totaled 2.6 million tons a year ago, with nearly half of that volume going to China.
Given that Ukraine corn exports are currently constrained by the ongoing war, China appears to be looking elsewhere for supplies.
Brazil is a good candidate for an alternative supplier during the remainder of 2021/22 and 2022/23. Production for the current safrinha crop has recovered from the prior year and exportable supplies are expected to be ample through the end of the calendar year. Moreover, production and exports for the outyear are forecast at yet another record high.
China is forecast to be the world’s largest corn importer in both 2021/22 and 2022/23, though year-toyear imports are down to 18.0 million tons mostly due to the aforementioned constraints on Ukraine. As discussed in the February 2022 edition of this publication, China’s corn imports are highly concentrated.
Though the timing and potential volume of Brazilian corn imports are uncertain, this agreement represents an attempt at diversification for China as well as a potentially major market for Brazil.
