Brazil plans to expand corn and wheat acreage in 2022/23 due to rising prices and demand, according to a report by the USDA’s Foreign Agricultural Service (FAS), but will there be enough in Brazil due to the conflict in the Black Sea region? Fertilizers are still an issue. Maize area is expected to expand by 1 million hectares to 22.5 million hectares, with production estimated at 22.5 million tonnes. Wheat acreage will increase to 3.4 million hectares, with production reaching nearly 9 million tonnes.
Corn production is estimated to be up 3 percent from the previous marketing year and set a new record. Brazil is the third largest corn producer and exporter in the world. Growers will be constrained by high prices and fertilizer availability. Corn consumes 17 percent of Brazil’s total fertilizer use, the world’s largest importer of fertilizers, FAS said. Top suppliers include Russia, Canada, China, Morocco, the United States and Belarus. Due to the conflict in Ukraine, the market believes that the flow of Russian fertilizers will slow down significantly, or even stop this year and next. Brazilian government officials have sought deals with major fertilizer exporters from Canada to the Middle East and North Africa to fill the expected shortfall, FAS said. However, the market expects some fertilizer shortages to be inevitable, the only question is how big the shortfall will be. Preliminary corn exports for 2022/23 are forecast at 45 million tons, up 1 million tons from the previous year. The forecast is backed by expectations for a new record harvest next season, which would leave ample supplies available for export. If production is lower than initially expected, then exports may also be lower.
The wheat area is expected to increase by 25 percent from the previous season. Preliminary yield forecasts are estimated at 2.59 tonnes per hectare. Taking into account the production forecast, FAS said Brazil’s wheat production could exceed the current record by about 2 million tonnes. Wheat will be the first major crop to be planted in Brazil amid fears of tight fertilizer supplies. FAS confirmed that most of the input contracts for the winter crops had been signed before the conflict began, and deliveries were now underway. However, it is difficult to estimate whether 100% of the contract will be fulfilled. In addition, it is unclear whether those producers who grow soybeans and corn will choose to save some inputs for these crops. Similar to corn and other commodities, some wheat producers may choose to reduce fertilization simply because their prices are being squeezed out of the market, FAS has tentatively set its wheat export forecast for 2022/23 at 3 million tonnes in wheat grain equivalent calculate. The forecast takes into account the strong export pace seen in the first half of 2021/22 and the expectation that global wheat demand will remain firm in 2023. FAS said: “Exporting more than 1 million tonnes of wheat is a huge paradigm shift for Brazil, which typically exports only a fraction of its wheat production, around 10%. If this wheat trade dynamic persists for several quarters , Brazil’s wheat production is likely to grow significantly and become the world’s leading exporter of wheat.”
Post time: Apr-10-2022