May 18, 2017
Mexican Delegation went to Brazil Looking to Purchase Grain
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The Brazilian Minister of Agriculture and the Mexican Secretary of Agriculture organized a series of meetings last week in Sao Paulo between Brazilian and Mexican businesses involved in the international grain trade. The Mexican delegation is interested in diversifying its sources of rice, corn, and soybeans and Brazil of course, is a large producer of all three crops.
The Mexican businesses in the delegation are responsible for importing more than 70% of these grains into Mexico. The Brazilian business had the opportunity to offer their products and the conditions needed to conduct business. The Mexican delegation also visited the Port of Santos and they stayed in Brazil until this past weekend.
There are reports that some business was completed during the meeting and that several vessels of corn should arrive in Mexico by the end of the summer. During 2017, Mexico might import up to 3 million tons of Brazilian corn and that could increase to 5 million tons in 2018. Since Brazil does not have a history of exporting corn to Mexico, it takes a while to set up the needed protocols and phytosanitary standards in order to ramp up imports.
Nearly all of Brazil's corn exports come from the safrinha corn production which will be harvested during June-July-August. Brazil's corn exports usually start in August and build throughout the fall. The domestic price of corn in Mato Grosso, which is Brazil's largest corn producing state, is already very low and below the minimum price guaranteed by the government which is $16.50 per sack or approximately $2.40 per bushel. Prices are expected to fall even more when harvest begins, so Brazilian corn could be competitive with U.S. corn going into Mexico.