48
Inor Ag. Assmann
T
here are undeniable difficul-
ties for the Brazilian corn farm-
ers to fetch prices that cover the
production costs in the 2016/17
growing season, not to mention
the opportunity for earning some income,
a picture that is getting worse at a moment
when the second crop, the most impor-
tant of the year, is reaching themarket as of
June. The prices were running low and fell
further because of the huge second crop
and the concentrationof supply, equally be-
cause of logistic hurdles and deficient ware-
housing structures. The weakened soybean
scenario was responsible for delayed sales
and the oilseed continued occupying space
in thewarehousing structures. The problem
reached such proportions that some corn
growers in the Center-West had to store
their crop in the yards of the companies, be-
fore commercializing it.
Although the remuneration is not attrac-
tive enough in 2017, Alysson Paolinelli, pres-
ident of the Brazilian Association of Corn
Producers (Abramilho), guarantees that in a
broader perspective this scenario should im-
proveinglobalterms.Inhisview,theCountry
is doing its task of meeting global demand,
whichneverstopssoaring.“Wecannotafford
tofrustratetheexpectationonourcapacityof
beingtheguarantorsofinternationalfoodas-
surance”, he says.
Paolinelli argues that it is important for
the supply chain to evaluate, at themoment,
the difference of the contexts between the
occasional variation of the prices impact-
ed by the size of the crops in one season and
thefundamentalconceptsofthemarket.The
focus, he understands should be the aver-
age trajectory of global trade, which points
to steady growth in demand and to a great
number of undefined questions about the
future supply capacity of some countries.
Therefore,hemaintainsthatBrazilwillnotre-
duce its productive capacity, as in the future
the Country will have to meet a huge part of
theglobal demand for corn,which is estimat-
edat 350million tons, by2050.
TheformerministerofAgriculturealsore-
calls that speculation results from expecta-
tion, and will never stop. “If there is a short-
age of grains, huge global funds are always
ready to supply the market and make mon-
ey, but stay away when the market is fully
supplied. In his understanding, the prices in
Brazil suffered a “hiccup” from internal cir-
cumstances – sizeof thecrop, lackof efficient
agricultural policy, weakened economy, dis-
turbed political scenario, deficient infrastruc-
ture and alignment of an unfavorable and
temporary international market. “However,
demand is soaring andwill result into steady
prices in thenear future”, heanticipates.
n
Firmand
strong
Far beyond themoment, Abramilho
PRESIDENTAlyssonPaolinellisaystheCountrycannotaffordto
frustratetheexpectationofbeingtheguarantorforfoodassurance
InPaolinelli’s view, theworld is dependent onBrazilian cornnowand in the future
n
n
n
Protection is needed
The fragile scenarioof the economy leads the federal government to fail to complywith, for example, the three different laws that deter-
minetheminimumpriceofanagriculturalproduct.“Then,thegovernmentcomesupwiththeProductionFlowProgram(PEP)andauctions
that do not solve the problem”, Abramilho president Alysson Paolinelli laments. He has it that, in spite of the reflections of theUnited States
cropallovertheworld,atthebeginningofthesecondhalfoftheyear,thecorntradeinthesecondhalfoftheyeartendstobesteadier.
Thefactisthattherelationbetweentheexchangerate–withadollaratR$3.30–andthelowerdomesticpricesmakeBraziliancorncom-
petitive in the international market. This will lead to soaring exports. The smaller domestic supply will help recompose and push up prices,
buttheymaynotreachthedesiredlevelsthatwouldyieldtheincomethefarmersdeserve.Fortheseoccasionaloscillations,Paolinelliunder-
standsthattheBrazilianfarmersshouldbeprotectedbyanefficientfarminsurancesystem,onethatguaranteesminimumpricesadjustedto
production costs, credit lines at compatible interest rates, commercialization and investments inwarehousing, technologies and infrastruc-
ture.“Fromthefarmgatetothefields,wehavegrownincompetitivenessandinvestmentsintechnology,butoutsidethefarmgatewedonot
havethesupportthatthefarmersinothercountrieshave,particularlythecountriesthatcompetewithus”,hesummarizes.
