Jun 02, 2022

Brazil to Import Record Amounts of Corn From Paraguay in 2022

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

Livestock producers in southern Brazil are expected to import record amounts of corn from Paraguay in 2022 to keep their operations up and running. Two consecutive years of dry weather in southern Brazil have resulted in disappointing corn production in the region which always runs a corn deficit.

In past years, most of that deficit was made up by importing corn from central Brazil, but corn production in central Brazil has also been disappointing for the last two years as well. To make up the difference, livestock producers are turning more to neighboring Paraguay for their corn supplies. In June, farmers in Paraguay will start harvesting what is expected to be a record large safrinha corn crop.

The cooperative Cooperativa Central Aurora Alimentos, which is the third largest poultry and hog processor in Brazil, indicated they will purchase some of their needed 2022 corn supplies from Paraguay. Their principal operations are located in the western part of the state of Santa Catarina and close to the border with Paraguay. The corn would be trucked in from Paraguay through the dry port of Dionisio Cerqueira in western Santa Catarina.

The Paraguayan consulting firm DasAgro estimates that Paraguay will export between 3.5 to 3.8 million tons of corn during Paraguay's commercial year starting in May with 2.0 to 2.5 million tons going to Brazil. This is double last year's volume. From May 2021 to April 2022, Paraguay exported 1.3 million tons of corn with 99% going to Brazil.

Brazil exports corn from central Brazil while at the same time importing corn into southern Brazil and it is all due to the transportation logistics of Brazil. A large part of the corn exported by Brazil goes through the Port of Santos and it arrives at the port by rail from the state of Mato Grosso, which is Brazil's largest corn producing state.

Southern Brazil does not have good transportation logistics connecting the producers in central Brazil with the consumers in southern Brazil. All the corn imported from the center-west region of Brazil into southern Brazil must come in by truck with distances as much as 2,000 kilometers. In contrast, corn imported from Paraguay into the state of Santa Catarina may only have to travel by truck as little as 500 kilometers.

According to the president of the Hog Producers Association of Santa Catarina (ACCS) the state will run a deficit of 4.5 million tons of corn in 2022 due to low corn production in the state caused dry weather. That corn will be imported from central Brazil, Paraguay, as well as Argentina.