47
The turning point in stimulating pro-
duction, and even in the complexity of do-
mestic supply, is related to the fact that pric-
es are way too high. This is the opinion
expressed by Rubens Augusto de Miranda,
Agricultural Economy Researcher at Em-
brapa Corn and Sorghum, in Sete Lagoas
(MG). The Brazilian cereal, “cheap” in the
past, is now expensive not only in the do-
mestic market, but also in the international
market, and the blame goes to the depreci-
ation of the national currency. “The result
could be a possible reversal of the foreign
trade flow of the kernel, with a decrease in
exports and rising imports”, he notes.
As an example he recalls that, in May
2016, the Santa Catarina State Association
of Pig Farmers (ACCS) acquired an amount
of 1,000 tons of corn from Paraguay, for
US$ 160 per ton, while in the national sce-
A close watch on the accounts
As corn supplies dwindle, there is a double challenge: to ensure offer at
competitive prices for other supply chains andmake good on foreign contracts
nario corn was offered to the association
for US$ 267 per ton. Furthermore, many
export contracts signed in early 2016, with
the evolution of the prices, turned out to
be little advantageous, encouraging the
farmers to fail to comply with the trading
companies that dominate corn exports.
On the other hand, some farmers in the
states of Mato Grosso and Goiás, greatly af-
fected by adverse weather conditions, may
not harvest enough corn to make good on
their export contracts.
The acquisition of corn from other na-
tions took great advantage of the temporary
elimination of the import tariff for coun-
tries outside the Mercosur bloc, which, up
to that time, incurred and 8-percent import
fee. “This is significant because the availabil-
ity of corn in the second half of 2016 could
improve as a result of a reduction in exports
and increase in imports”, Miranda analyses.
The real beneficiary of the elimination of
the 8-percent import tariff is the corn pro-
duced in the United States, in light of the
fact that corn from Mercosur countries has
always been exempt from this tariff.
In 2013, Brazil imported 907 thou-
sand tons of corn, 771 thousand tons in
the following year and 369 thousand tons
in 2015. Approximately 90% of the vol-
ume imported during these three years
was purchased by the states of Santa Ca-
tarina and Paraná. In 2016, besides these
two states, some northeastern states also
brought corn in from abroad. The North-
east acquired 30% of the 378.3 thousand
tons imported from January to May. Mi-
randa concludes that, although exports
shrank while imports soared, the trend is
for corn to continue fetching good prices
throughout 2016. A real adjustment could
occur with the arrival of the 2016/17 crop.
