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October 18, 2016

Only Light Interest Expressed in Importing U.S. Corn into Brazil

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

After the Brazilian National Biosecurity Technical Commission (CTNBio) recently approved three more GMO corn hybrids for importation from the U.S. into Brazil, there appears to be only light interest in actually importing corn from the United States.

Prior to the approval of these GMO corn hybrids, the Brazilian government had waived the 8% import tariff for corn imports outside of Mercosul countries as a way to encourage additional corn imports. The Brazilian government has authorized up 1 million tons of corn imports from outside of Mercosul until December 31, 2016.

As of last Friday, October 14th, the Brazilian Export Ministry reported that they had not received any request for importing corn from outside of Mercosul countries.

Northeastern Brazil would seem to be the logical destination for corn imports from the U.S. due to logistical concerns, but reports indicate that livestock producers in the region may have already contracted enough corn from Argentina to fulfill their needs through the end of the year.

From January through September of this year, Brazil imported 1.42 million tons of corn with the vast majority coming from neighboring Paraguay and Argentina. These imports represent a 532% increase compared to 2015.

One of the reasons expressed for requesting that GMO corn hybrids be approved for importation was to put pressure on domestic corn prices. It seems to have had a slight impact on domestic corn prices. The Center for Advanced Studies in Applied Economics (CEPEA) reported that during the week of October 7 to 14, the spot price for corn in Campinas, Sao Paul declined 0.36% to close last Friday at R$ 43.48 per sack or approximately $6.00 per bushel.