Oct 10, 2016
Brazilian Commission Approves GMO Corn Imports from the U.S.
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
In their monthly meeting last week, the Brazilian National Technical Commission on Biosecurity (CTNBio) approved three more GMO corn hybrids from the United States for importation into Brazil. This comes after one corn hybrid was approved in their September meeting.
Livestock producers in southern Brazil have been pushing for these approvals for months as a way to ease corn shortages and to put pressure on domestic corn prices. Brazil needs to import corn due to an overly aggressive export program in late 2015 and early 2016 and a very disappointing 2015/16 safrinha corn crop. Corn is already being imported into Brazil from Paraguay and Argentina and now there might be some corn coming in from the United States.
The president of the Brazilian Animal Protein Association (ABPA) indicated that negotiations to import U.S. corn have been ongoing and all that was needed to finalize the contracts was a green light from the CTNBio Commission. GMO corn hybrids are already planted on a wide scale in Brazil, but each new GMO corn hybrid must be approved by the commission before being allowed into the country.
It remains to be seen how much corn will be imported from the U.S. because of the calendar. Brazil will need to continue importing corn until about next January when harvesting of the 2016/17 full-season corn crop will begin, so U.S. corn imports will only be needed for several more months. Additionally, there is still confused about the approved corn hybrids. I thought there were more GMO corn hybrids grown in the U.S. than the few approved by the commission, so this still needs to be clarified.
If corn is imported from the U.S., it will probably go into northeastern Brazil where there is always a corn deficit. It is cheaper to import corn into that region of Brazil than it is to transport the corn into the region by truck from southern Brazil or the center-west region of Brazil.
If the objective of the approval was to pressure domestic corn prices, it appears to be working. Domestic corn prices in Brazil peaked earlier this year at more than seven dollars per bushel and they have been falling steadily since then.