Grain and Feed Annual Report

An Expert's View about Crops and Support Services in Brazil

Posted on: 31 Mar 2012

2012/13 corn production is forecast at a record 68 million metric tons (mmt), with exports placed at 12.5mmt.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 3/15/2012 GAIN Report Number: BR0803 Brazil Grain and Feed Annual Report 2012/2013 Forecast: Significant Increase in Corn Production, Rice and Wheat Recovery Approved By: Robert K Hoff Prepared By: Caleb O'Kray Report Highlights: 2012/13 corn production is forecast at a record 68 million metric tons (mmt), with exports placed at 12.5mmt. 2012/13 wheat and rough rice production are forecast to recover planted area lost to production in 2011/12 and to reach 6.1mmt and 13.5mmt, respectively. 2011/12 rice exports are forecast at 900 thousand metric tons (tmt). U.S. wheat exports in 2011/12 are estimated to reach 700tmt, the second highest level on record. With the 2011/12 rice prices and trade environment, rice exports are projected at 700tmt without the support of government programs. Commodities:   WHEAT Wheat Brazil 2010/2011 2011/2012 2012/2013 Market Year Begin: Oct 2010 Market Year Begin: Oct 2011 Market Year Begin: Oct 2012 USDA Official New Post USDA Official New Post USDA Official New Post Area Harvested 2,150 2,150 2,170 2,000 2,200 Beginning Stocks 1,517 1,517 782 782 482 Production 5,900 5,900 5,800 5,700 6,100 MY Imports 6,665 6,665 7,000 7,100 7,000 TY Imports 6,710 6,710 7,000 7,300 7,100 TY Imp. from U.S. 405 405 0 700 400 Total Supply 14,082 14,082 13,582 13,582 13,582 MY Exports 2,500 2,500 1,500 1,800 1,500 TY Exports 2,539 2,539 1,500 1,820 1,500 Feed and Residual 200 200 500 600 600 FSI Consumption 10,600 10,600 10,700 10,700 10,800 Total Consumption 10,800 10,800 11,200 11,300 11,400 Ending Stocks 782 782 882 482 682 Total Distribution 14,082 14,082 13,582 13,582 13,582 1000 HA, 1000 MT, MT/HA 2011/2012 Wheat Supplies: Wheat production is placed at 5.7mmt. The slight decrease in production reflects the area loss to second-crop corn planting. Wheat production area is estimated at 2 million hectares, a seven percent decrease from 2010/11. Wheat production, mostly concentrated in the three southern-most states of Paraná, Santa Catarina and Rio Grande do Sul, is shifting further south. Paraná, long the lead producer of Brazilian wheat, is expected to undergo a wheat production shift from the northern and western to the central and southeast regions of the state. Paraná is expected to lose some area planted to wheat as more producers shift to second-crop corn. Santa Catarina and Rio Grande do Sul are expected to gain more area harvested to wheat, offsetting the area loss in Paraná. 2011/2012 Wheat Consumption: Wheat consumption is projected at 11.3 mmt. The almost five percent increase from 2010/11 has three primary influencing factors: stable (albeit low) population growth (incorporating nascent immigration trends from neighboring countries), increasing usage of wheat feed, and wheat-product consumption rates that mirror the growth in the middle class (particularly Brazil?s income classes C and D). Bread production accounts for approximately 55 percent of wheat consumption: loaf bread consumption is slowly taking market share away from the consumption of French bread, long the local staple. Pasta accounts for approximately 15 percent of wheat consumption. Pastries and other niche products also account for 15 percent of wheat use. Feed is expected to account for ten percent of the wheat consumption, a 300 percent growth from 2010/11?a growth which government support programs have facilitated. It is expected that millers will be able to source more domestic wheat from Rio Grande do Sul as wheat quality there continues to improve due to better weather patterns and particularly through better seed. 2011/2012 Wheat Trade: Brazil?s wheat imports are estimated at 7.1 mmt in 2011/12, a six percent increase from 2010/11, and slightly higher than USDA?s March estimate due to expected consumption growth. Imports of U.S.-origin hard winter wheat are estimated at 700tmt, the second highest level on record. Brazil historically has produced enough wheat to meet only half of its consumption needs. Given logistical advantages and tariff exemptions, Mercosul members (Argentina, Uruguay and Paraguay) typically account for 98 percent of Brazil?s wheat imports. The United States has been the primary back-up supplier in years when Mercosul cannot meet Brazil?s import needs. U.S. wheat typically enters Brazil to supply millers in the Northeast, where it can compete due a waiver on the merchant-marine tax. U.S. wheat is favored by Brazilian millers due to its superior quality that allows for blending with domestic wheat to achieve the varied quality traits demanded by the industry. While Mercosul wheat production is anticipated at normal levels, Argentina, and to a lesser degree, Paraguay, are expected to export more wheat to markets other than Brazil. Wheat exports are estimated at 1.8 mmt. 2010/11 wheat exports were a record high, and 2011/12 exports, while 29 percent lower from the year before, are estimated to reach the second-highest level on record. Wheat exports will continue to be strengthened by Brazilian government support through the Premium for Product Outflow Program (PEP). Flour imports from Argentina, estimated at 810 tmt, are expected to continue growing. This remains a contentious issue between the Brazilian industry and the Brazilian government. 2012/13 Wheat Supplies: Wheat production area is forecast at 2.2 million hectares, a nine percent increase from 2011/12. Wheat area is forecast to recover some land from soybeans in Rio Grande do Sul and Santa Catarina. Wheat production is forecast to continue its shift further south and it is expected that Rio Grande do Sul will overtake Paraná to become the largest wheat producing state. Wheat production is forecast at 6.1mmt, a seven percent increase over 2011/12. Domestic wheat should continue to improve in quality for two reasons: (1) the production area shifts to the South should provide a more conducive growing climate, (2) Post anticipates that Brazil?s new flour standards will enter into force. The new flour standards call for better wheat characteristics, encouraging producers to invest in better seeds. Currently, the standard is scheduled to enter into force in July 2012. However, as the new standard remains an ongoing discussion among producers, millers and the government, it is likely that the standard implementation will be postponed for a third and final time to 2013. 2012/13 Wheat Consumption: Wheat consumption is forecast at 11.4 mmt, a slight increase from 2011/12. There are no major alterations anticipated to current consumption trends. Feed wheat is forecast to continue at 600 tmt, assuming that PEP will still influence market decisions and transactions. Corn prices have become the floor for wheat prices. When wheat prices reach this floor, livestock producers will have the possibility to alternate between feed sources. 2012/13 Wheat Trade: Wheat imports are forecast at 7mmt and exports are forecast at 1.5mmt, one and 20 percent decreases, respectively, from 2011/12. U.S. wheat exports to Brazil are forecast at 400 tmt. These forecasts are all predicated on a return to Mercosul countries supplying the bulk of Brazil?s import needs, as opposed to the unusual trade scenario of 2011/12. Table 1.1: Brazil Wheat Imports Brazil Wheat Imports HTS 100110 and 100190 Wheat, Group 60 (2007) Quantity (Unit: 1,000 mt) Partner Country 2009 2010 2011 World 5,445.60 6,323.21 5,740.45 Argentina 3,215.31 3,620.68 4,546.38 Uruguay 862.98 1,163.60 686.49 Paraguay 820.66 635.00 363.82 United States 218.15 494.01 104.25 Canada 302.32 371.11 39.49 Lebanon 0.03 0.04 0.03 Angola 0.00 10.00 0.00 France 0.00 0.04 0.00 Poland 26.16 0.00 0.00 Russia 0.00 28.72 0.00 Source : Secretaria de Comércio Exterior Table 1.2: Brazil Wheat Flour Imports Brazil Wheat Flour Imports HTS 1101 Wheat Flour, Group 44 (2007) Wheat Equivalent (conversion 1.368) Quantity (Units: 1,000 mt) Partner Country 2009 2010 2011 World 637.54 636.79 701.46 Argentina 596.45 590.90 656.28 Uruguay 35.38 35.85 33.41 Paraguay 4.57 7.05 9.56 Canada 0.05 1.98 1.49 Italy 0.09 0.14 0.35 United States 0.00 0.00 0.14 United Kingdom 0.89 0.82 0.11 France 0.10 0.03 0.08 Belgium 0.00 0.01 0.03 Source : Secretaria de Comércio Exterior Table 1.3: U.S. Wheat Exports to Brazil U.S. Wheat Exports to Brazil (tons) 2007 2008 2009 2010 2011 354,000907,000218,000494,000104,248 Source : Secretaria de Comércio Exterior Table 1.4: Brazil Wheat Exports Brazil Wheat Exports HTS 1001 Wheat, Group 60 (2007) Quantity (Unit: 1,000 mt) Partner Country 2009 2010 2011 World 384.50 1324.09 2350.47 Algeria 22.50 0.00 705.55 Egypt 27.50 57.30 185.95 Tunisia 0.00 27.25 178.70 Kenya 26.25 36.75 158.95 Turkey 0.00 0.00 154.05 Bangladesh 0.00 0.00 135.33 Libya 0.00 48.64 112.43 Yemen 0.00 0.00 110.92 South Africa 50.15 135.13 90.85 Saudi Arabia 0.00 0.00 89.16 Morocco 0.00 0.00 85.80 United Arab Emirates 0.00 0.00 61.49 Mozambique 0.00 14.00 41.78 Nigeria 0.00 0.00 35.02 Sudan 0.00 0.00 33.99 Israel 0.00 0.00 27.50 Syria 0.00 0.00 26.50 Indonesia 25.00 0.00 22.50 Sri Lanka 0.00 0.00 21.30 Oman 25.00 0.00 19.35 China 0.00 0.00 18.00 Ethiopia 0.00 0.00 16.01 Mali 0.00 0.00 8.80 Congo 0.00 0.00 8.10 Source : Secretaria de Comércio Exterior Wheat Prices: Table 1.5: Brazil Wheat Prices Monthly Wheat Prices in Paraná Prices in R$ per mt (Curitiba c.i.f.) Year 2009 2010 2011 Jan 520.95 474.74 457.81 Feb 566.84 457.22 473.89 Mar 554.55 460.00 493.59 Apr 549.00 431.00 499.40 May 540.50 430.95 496.20 Jun 540.00 426.00 493.18 420.00 Jul 538.68 488.19 Aug 509.10 452.27 480.21 Sep 480.48 487.14 480.92 Oct 490.00 480.00 474.28 Nov 484.00 486.71 458.68 Dec 486.71 474.29 447.72 Source: CEPEA (Calculated using the exchange rate: 1US$=$1.72) Commodities: CORN Corn Brazil 2010/2011 2011/2012 2012/2013 Market Year Begin: Mar 2011 Market Year Begin: Mar 2012 Market Year Begin: Mar 2013 USDA Official New Post USDA Official New Post USDA Official New Post Area Harvested 13,800 13,800 15,300 14,300 16,000 Beginning Stocks 9,989 9,989 9,789 9,789 10,089 Production 57,500 57,500 62,000 62,000 68,000 MY Imports 800 800 500 800 800 TY Imports 474 474 800 850 800 TY Imp. from U.S. 0 0 0 0 0 Total Supply 68,289 68,289 72,289 72,589 78,889 MY Exports 9,000 9,000 10,000 10,500 12,500 TY Exports 11,583 11,583 9,500 10,000 12,500 Feed and Residual 42,500 42,500 45,000 44,500 47,500 FSI Consumption 7,000 7,000 7,000 7,500 8,000 Total Consumption 49,500 49,500 52,000 52,000 55,500 Ending Stocks 9,789 9,789 10,289 10,089 10,889 Total Distribution 68,289 68,289 72,289 72,589 78,889 1000 HA, 1000 MT, MT/HA 2011/2012 Corn Supplies: Corn production area is estimated at 14.3 million hectares, a three percent increase from 2010/11 but a seven percent decrease from USDA?s official 2011/12 estimate. The corn area lost to the December-January drought in the South (particularly the estimated 20 percent corn loss in Paraná?s first-crop corn) led to lower estimates. Corn production is held steady at 62mmt. These numbers already reflect the corn losses from the drought. Second-crop corn planting has gone very well throughout the country. The second-crop corn was planted in the ideal period of time (the optimal planting window is between mid-December and mid-March, depending on the region of the country) and has had propitious levels of precipitation. The window for second- crop corn in Mato Grosso closed at the end of February and in Paraná in mid-March. Second-corn crop yields will be contingent on two factors: (1) the continuation of rain to the grain filling phase, (2) the absence of frost events in Paraná. Producers throughout the country have experienced a shortage of high-quality seed for second-crop corn. The lack of advance planning, coupled with strong international prices, led to a larger-than- unexpected first-crop corn planting that utilized some of the seed supply that had been purchased for second-crop corn. Despite these reports, second-crop corn planting appears to have gone smoothly. The shortage of high-quality seed may have an impact on final yields. 2011/2012 Corn Consumption: Corn consumption is placed at 52mmt, in line with USDA official estimates. Feed is estimated at 44.5mmt. Corn feed use is expected to have the following consumption break-down among major livestock categories: poultry at 26mmt (58 percent), swine at 14mmt (31 percent), and cattle at 4mmt (9 percent). 2011/2012 Corn Trade: Corn imports are placed at 800tmt and exports at 10.5mmt, in line with USDA official estimates. Strong international prices continue to make corn exports not only feasible but also desirable for both Brazilian producers and traders. Imports continue to come mostly from Paraguay to meet domestic needs. Iran, Taiwan, and northern Africa continue to be the largest export markets for Brazilian corn. (See Table 2.2) The December-January drought in Latin America caused greater corn loss in Argentina than in Brazil. Brazil will probably avail itself of this enhanced export window opportunity. The Iran Factor: Iran continues to be by far Brazil?s largest corn export market. According to Brazil?s export statistics, Brazil?s CY2011 corn exports to Iran were estimated at 1.9mmt, a 27 percent increase from 2010. Brazil?s first quarter 2012 exports to Iran have been strong. 2012/13 Corn Supplies: Corn production area is forecast at 16 million hectares, a 12 percent increase from the 2011/12 production area (though only a six percent increase in planted area?since 6 percent of the 2011/12 planted area was abandoned due to the drought). Post forecasts that the first-crop corn production area will remain constant and that overall 2012/13 area gains will come from increased second-crop corn production. In essence, half of that 12 percent increase corresponds to the recovery of the corn area lost to the drought; the remaining 6 percent growth will come from increased second-crop corn production, particularly in the states of Mato Grosso, Goiás, and Paraná. While impossible to forecast, the La Niña phenomenon is predicted by many analysts to have a net positive impact on the 2012/13 corn crop. While consensus exists among analysts that second-crop corn will increase its production area, there is a lack of consensus on first-crop corn production area. Some analysts believe that international corn prices will dictate (perhaps at the last minute) whether 2011/12 first-crop corn area gains (mostly in the South from former soybean-producing regions) will continue for first-crop corn production or return to soybean production in 2012/13. The sustained advances in shorter maturation soybean varieties will continue to increase the planting of second-crop corn in the appropriate window in 2012/13 and beyond. In this manner, these varieties with shorter maturation rates will strengthen second-crop corn yields. 2012/13 Corn Consumption: Corn consumption is forecast at 55.5mmt, a seven percent increase from 2011/12. An anticipated increase in animal feed and industrial use (corn syrup) are responsible for the forecast growth in corn consumption. Feed usage is forecast at 47.5mmt, a seven percent increase from 2011/12. Corn feed consumption is forecast to increase for expanding poultry, swine, and bovine production. Poultry operations are forecast to continue expanding at three percent, particularly for domestic market consumption. Swine production is also forecast to expand, since China recently visited Brazil to double the number of swine facilities approved to export to China. With 42 swine facilities now approved for export to China, a forecast increase in swine production of five percent would raise the 2012/13 corn feed demand. Corn feed demand is also forecast to increase to meet the needs of cattle finishing, via feedlots. Feedlot use is limited in Brazil, as 90 percent of Brazilian cattle are sold directly from pasture to slaughterhouse, but feedlot use is forecast to continue its gradual increase. Industrial corn use is forecast to increase to meet the growing domestic demand for corn syrup. Market trends strongly suggest that the growing middle class will increase its consumption of processed products (including both foods and beverages), requiring larger quantities of corn syrup. 2012/13 Corn Trade: Corn imports are forecast to hold steady at 800tmt and corn exports are forecast at 12.5mmt, a 19 percent growth from 2011/12. With Paraguay as the primary supplier, corn imports are expected to continue their role of meeting discrete local consumption needs. Forecast record corn exports at 12.5mmt are predicated on record corn production of 68mmt. Corn exports are forecast to grow for three reasons: (1) a domestic corn surplus as production growth is forecast to outstrip consumption growth, (2) continued attractive international commodity prices, and (3) increasing international demand. Export markets are forecast to remain the same as in years past, with the possible exceptions of China which could begin to import Brazilian corn and Iran which could be impacted by politically-influenced market irregularities. Table 2.1: Brazil Corn Imports Brazil Corn Imports 1005, Corn (Maize) Quantity (Unit: 1,000 mt) Partner Country 2009 2010 2011 World 1,137.48 462.54 656.34 Paraguay 1,114.84 443.06 619.01 Argentina 21.27 18.47 37.01 United States 0.81 0.18 0.32 Source : Secretaria de Comércio Exterior Table 2.2: Brazil Corn Exports Brazil Corn Exports 1005, Corn (Maize) Quantity (Unit: 1,000 mt) Partner Country 2009 2010 2011 World 7,857.39 10,895.81 9,592.07 Iran 1,767.39 1,490.64 1,905.67 Taiwan 701.90 1,090.88 1,174.42 Japan 269.49 606.68 734.56 Algeria 258.96 294.50 691.96 Morocco 417.87 958.59 578.74 Malaysia 838.08 924.30 567.29 Egypt 0.15 307.09 446.84 Colombia 785.57 754.71 427.47 Netherlands 32.62 324.49 423.53 Spain 210.60 819.37 401.99 Saudi Arabia 651.05 815.65 369.19 Indonesia 20.78 445.20 201.20 Dominican Republic 12.95 149.73 167.77 Cuba 0.00 121.27 155.60 Peru 57.90 75.92 149.77 Korea South 583.64 191.35 131.63 Portugal 0.05 405.45 124.32 Vietnam 190.51 147.29 119.73 Angola 97.91 81.45 105.75 Source : Secretaria de Comércio Exterior Corn Prices: Table 2.3: Brazilian Corn Prices Monthly Corn Prices Prices in R$ per 60 kg (discounted by the CDI/CETIP tax) Year 2009 2010 2011 Jan 23.67 19.66 30.35 Feb 22.26 18.35 31.68 Mar 20.62 18.47 31.44 Apr 21.29 18.16 29.94 May 22.25 18.67 28.69 Jun 22.24 19.43 30.75 Jul 20.55 18.84 30.31 Aug 19.42 20.56 30.20 Sep 19.12 24.36 31.92 Oct 20.60 25.15 30.75 Nov 20.41 28.29 29.81 Dec 20.02 28.36 28.18 Source: CEPEA (Calculated using the exchange rate: 1US$=$1.72) Commodities: RICE, MILLED Rice, Milled Brazil 2010/2011 2011/2012 2012/2013 Market Year Begin: Apr 2011 Market Year Begin: Apr 2012 Market Year Begin: Apr 2013 USDA Official New Post USDA Official New Post USDA Official New Post Area Harvested 2,833 2,833 2,500 2,550 2,800 Beginning Stocks 550 550 800 600 400 Milled Production 9,300 9,300 7,684 8,000 9,200 Rough Production 13,676 13,676 11,300 11,765 13,529 Milling Rate (.9999) 6,800 6,800 6,800 6,800 6,800 MY Imports 600 600 640 600 600 TY Imports 620 620 640 620 620 TY Imp. from U.S. 0 0 0 0 0 Total Supply 10,450 10,450 9,124 9,200 10,200 MY Exports 1,250 1,450 600 700 900 TY Exports 1,300 1,350 625 625 800 Consumption and Residual 8,400 8,400 8,100 8,100 8,300 Ending Stocks 800 600 424 400 1,000 Total Distribution 10,450 10,450 9,124 9,200 10,200 1000 HA, 1000 MT, MT/HA           2011/2012 Rice Supplies: Rice production area is estimated at 2.55 million hectares, a ten percent decrease from 2010/11. The decreased production area is a result of the 2010/11 oversupply and subsequent low prices. Every rice-producing state in the country decreased production area or held steady from 2010/11. The appeal of soybean production has attracted some traditional rice producers, but for many growers rice may remain the only crop choice available due to climactic conditions. Rough rice production is placed at 11.765mmt, a 14 percent decrease from 2010/11. Factors contributing to the decreased production are the reduction in planted area and yield losses due to the December-January drought, which particularly impacted Southern Brazil. Southern Brazil accounts for 47 percent of the national rice production area but is responsible for 80 percent of the rice production, due to irrigation practices. The rice production area in Santa Catarina surpassed Mato Grosso, making it now the state with the third-largest amount of rice production area, behind Rio Grande do Sul and Maranhão (a state with extensive dry-land production areas but low productivity). Seed varieties most used in the South were IRGA417 and BR IRGA409, developed by the Rio Grande Rice Institute (IRGA). As of mid-March, the rice harvest is 35 percent complete, with the harvest anticipated to conclude in May. 2011/2012 Rice Consumption: Rice consumption is estimated to hold steady and in line with USDA official estimates at 8.1mmt, though a three percent decrease from 2010/11. The 2010/11 oversupply of rice led to the increased use of rice for feed, a phenomenon that will not be repeated to such an extent in 2011/12. Market trends indicate that rice consumption growth will be influenced by population expansion but that this growth in consumption will be somewhat undercut by consumptions patterns accompanying an increased economic prosperity. Population growth has been steady, continuing to spur consumption. While rice and beans have long been considered the traditional diet (even the ideal diet, according to some researchers), they continue to be associated with the food of the rural poor. As income levels increase, consumption preferences shift from rice to pasta and bread. Millers continue having difficulty with milling hybrid varieties of rice, due to higher breakage rates. Hybrid varieties benefit producers in the field but can create problems for producers when negotiating rice sales with the mills. 2011/2012 Rice Trade: Rice import estimates are maintained at 600tmt, slightly lower than USDA official estimates. Imports are expected to come primarily from Brazil?s Mercosul partners. (See Table 3.1) Rice exports are expected at 700tmt, a 52 decrease from 2010/11. Brazil?s 2010/11 exports were a record high, nearly triple the prior record year, levels only made possible through government support. At 700tmt, 2011/12 exports are estimated to be the second-largest export volume on record. The government support program used in 2010/11?PEP?is triggered when the market price dips below the Brazilian government?s official minimum price. Currently the market price for rice is 23 percent higher than it was in 2010/11, so it is probable that the market price will not go below the official minimum price. For that reason, it is expected that 2011/12 rice exports will not be supported by the PEP program. Traders anticipate a continuation of milled and parboiled rice shipments to the countries along the Atlantic coast of Africa and broken rice shipments to Senegal. (See Table 4.2) 2012/13 Rice Supplies: Rice production area in 2012/13 is forecast at 2.8 million hectares, a ten percent increase from 2011/12. The rice industry is forecasting that the 2011/12 production contraction will normalize rice supplies after the 2010/11 oversupply. The forecast growth incorporates the recovery of production area lost in 2011/12. Increased production area is forecast, in particular, for Santa Catarina and Rio Grande do Sul. The recovery of dry-land rice production area in Mato Grosso?in 2011/12 there was a 47 percent decrease from 2010/11?is not forecast. Rough rice production is forecast at 13.5mmt, a 15 percent increase from 2011/12. Production area recovery and the return to average trend yields (after the 2011/12 yield divergence due to the December-January drought) should account for the production increase. 2012/13 Rice Consumption: Rice consumption is forecast at 8.3mmt, a three percent increase from 2011/12. With increased rice supplies, consumption of feed rice is forecast to increase. After stocks dropped to 400tmt in 2011/12, stocks should rebound to 1mmt in 2012/13. 2012/13 Rice Trade: Rice imports are forecast to hold steady at 600tmt. Mercosul partner countries are expected to remain primary rice suppliers to Brazil. Rice exports are forecast at 900tmt, a 28 percent increase from 2011/12. The increase in rice exports is predicated on Brazil?s ongoing work to establish export markets in Africa. Given the increased production, Brazilian producers and traders will be eager to export rice to keep domestic supplies low and keep prices from dropping. Should market prices drop below the official minimum price, it is probable that the Brazilian government would reactivate its PEP program to support rice exports, thereby reducing domestic supply and price pressures. Table 3.1: Brazil Rice Imports Brazil Rice Imports Rice, Group 58 (2007) Quantity (Unit: 1,000 mt) Partner Country 2009 2010 2011 World 674.36 783.54 621.84 Argentina 244.15 251.02 259.02 Paraguay 115.74 124.28 185.17 Uruguay 312.54 370.63 174.59 Italy 1.29 1.19 2.31 Thailand 0.29 0.64 0.45 United States 0.22 35.41 0.17 Source : Secretaria de Comércio Exterior Table 3.2: Brazil Rice Exports Brazil Rice Exports Rice, Group 58 (2007) Quantity (Unit: 1,000 mt) Partner Country 2009 2010 2011 World 602.12 430.49 1,350.92 Nigeria 81.45 53.51 317.69 Senegal 95.97 140.89 119.21 Gambia 30.62 72.95 95.78 South Africa 64.11 3.71 85.61 Haiti 0.77 0.71 80.82 Sierra Leone 0.00 12.28 77.27 Venezuela 38.09 0.00 66.00 Nicaragua 0.00 0.21 50.09 Cuba 1.57 0.13 42.00 Switzerland 57.37 37.61 40.04 Spain 3.33 0.00 39.70 Benin 110.00 39.95 30.77 Netherlands 0.87 0.46 30.53 Liberia 1.00 5.45 28.47 Mauritania 0.00 0.00 25.40 Bolivia 12.22 10.61 19.19 Angola 12.57 8.24 17.56 Source : Secretaria de Comércio Exterior Rice Prices: Table 3.3: Brazil Rice Prices Monthly Rice Prices in Rio Grande do Sul Prices in R$ per 50 kg (type 1, Rio Grande do Sul; discounted by the CDI/CETIP tax) Year 2009 2010 2011 Jan 32.22 32.03 22.63 Feb 31.23 30.39 22.27 Mar 28.60 27.35 21.29 Apr 27.59 28.06 19.33 May 26.27 28.14 19.08 Jun 25.61 26.71 19.53 Jul 27.88 26.90 21.80 Aug 27.02 27.36 23.58 Sep 27.89 26.52 23.21 Oct 27.71 25.65 24.36 Nov 26.62 25.60 25.57 Dec 28.25 24.76 25.60 Source: CEPEA (Calculated using the exchange rate: 1US$=$1.72) Government Support for Commercialization and Export: In 2011, corn production received minimal government support. 2012 corn production is forecast to operate similarly. There was no export support for corn. Table 4.1: Government Support for Corn (Quantity Unit: 1,000 mt) Program 2006 2007 2008 2009 2010 2011 Acquisition (AGF) 2,223.7 273.3 149.5 587.9 103 1.2 PEP 3,087.9 1,183.3 599.2 4875.1 11,229 0 PROP 2,258.0 0.0 531.4 0 0 0 PEPRO 100.0 3,753.2 0.0 1,295.5 875 0 Total 7,669.7 5,209.8 1,280 6,758.5 12,208 1.2 Production 42,514.9 51,369.9 58,863.7 51,003.9 56,100 57,514 Participation % 18% 10% 2% 13% 21.6% 0 Source: Brazilian Ministry of Agriculture/SPA/DEAGRO and CONAB 2010/11 rice production received a small amount of government support, while exports are likely to have received significant support through the PEP program. (See Table 4.2) As a result of the strong implementation of the PEP program, accompanied by government-operated options contract for purchasing product from farmers, the Brazilian government estimates that almost 22 percent of 2010/11 rice production participated in its support programs. PEP use is not projected for 2011/12. Table 4.2: Government Support for Rice (Quantity Unit: 1,000 mt) Program 2006/07 2007/08 2008/09 2009/10 2010/11 Acquisition (AGF) 62.0 0.0 0.3 0.0 396.3 PEP 157.5 0.0 0.0 143.0 1,538.2 PROP 0 0.0 0.0 0.0 0 PEPRO 0 0 0 0 64.3 Options 0 0 0 0 - Round 1 982.8 - Round 2 385.1 Total 219.5 0.0 0.3 143.0 2,981.7 Production 11,315.9 12,059.9 12,602.5 12,059.9 13,613 Participation % 8% 0% 0% 1% 21.9% Source: Brazilian Ministry of Agriculture/SPA/DEAGRO and CONAB When government support for 2009/10 wheat production and exports was originally reported in January 2011, participation rates were recorded at only 12 percent. (See Table 4.4) However, given the lengthy cycle of the PEP implementation and reporting, the government raised the 2009/10 government support for wheat production and exports. Final 2009/10 government support for wheat through PEP rose to 3.3mmt, and exports reached a record 2.5mmt, phenomena which testify to the impact which the PEP program has on trade. With the 2009/10 data revised in January 2012, program participation rose to 72 percent. 2010/11 exports at 1.8mmt were almost all supported by PEP. PEP use for wheat is forecast for 2011/12. Table 4.3: Government Support for Wheat (Quantity Unit: 1,000 mt) Program 2006/07 2007/08 2008/09 2009/10 2010/11 Acquisition (AGF) 0 236.1 21.3 373.8 0.2 PEP 0 425.5 1,113.2 3,261.3 1,786 PROP 0 0 0 0 0 Total 0 661.6 1,416.9 3,635 1,786.4 Production 0 2,233.7 4,081.9 5,026 5,881.6 Participation % 0 29.6% 34.7% 72.3% 30.4% Source: Brazilian Ministry of Agriculture/SPA/DEAGRO and CONAB Table 4.4: Comparison of Government 2009/10 Wheat Support as Originally Reported in 2011 versus Revised Reporting in 2012 (Quantity Unit: 1,000 mt) 2009/10 2009/10 Percentage (Originally Reported (Revised Reported Difference in Program January 2011) January 2012) Reporting Acquisition (AGF) 49.3 373.8 658% PEP 567 3,261.3 475% PROP 0 0 0% Total 616.3 3,635 490% Production 5,026 5,026 0% Participation % 12% 72.3% 503% Source: Brazilian Ministry of Agriculture/SPA/DEAGRO and CONAB
Posted: 31 March 2012

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