Brazil has surpassed the US as China’s main maize supplier, just a year after the South American country’s shipments were approved.
Brazilian grain exports to the Asian country totalled 8.79 million tons in the accumulated year until November, 40% of the total of 22.18 million tons imported by China, according to customs data. US shipments reached 6.50 million, almost 30% of the total, less than half as compared to the previous year.
Previously dependent on the US and Ukraine, China sought to diversify its suppliers while Brazil’s output reached record levels. Chinese imports exceeded 20 million tonnes for three consecutive years, amid a recomposition of stocks and high demand for animal feed.
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“Brazil had a giant crop and its corn was cheap,” said Cherry Zhang, an analyst at Shanghai JC Intelligence. “The two countries also have friendly relations.” The tradings ordered a large amount of grain from the country earlier this year and now these loads are reaching China, she said.
Total corn imports in November were the highest ever recorded, according to a series of data started in 2005.
China signed a corn purchase agreement with Brazil last year and the first shipment arrived in January. Chinese imports of Brazilian maize in December are expected to total at least 1.5 million tons and should remain high in 2024, according to Shanghai JC.
Whatever the most attractive origin, exporters will face a weak market. Maize futures on Dalian’s commodities exchange fell 18% in 2023 and reached their lowest level in more than three years.
“Pessimism is permeating the market,” Chinese broker Holly Futures said in a note. “Producers face a lot of pressure to sell their grains, while tradings are reluctant to accumulate stocks.”
The fall in the profits of Chinese breeders and refrigerators, the main grain consumers, threaten the prospects for demand.
