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The Brazilian corn market had a year of strong price appreciation in 2020, which reached record levels in reais. Prices rose especially in the face of intense internal and external demand, the valued dollar, a supply controlled by sellers and production concerns.
SAFRAS & Market consultant, Paulo Molinari, highlights that 2020 began with the expectation of increases in the first half of the year and more comfortable prices in the second. “This is again due to a small summer harvest and a record harvest. Then, the pandemic arrived and the markets completely changed their environment”, he highlighted. The real jumped to R$ 6.00 and maintained its devaluation throughout the year.
Molinari notes that, initially, commodity markets suffered a strong impact and saw prices fall sharply abroad and in the domestic market. “However, it was then noticed that the demand for food did not fall and may have even grown”, he pondered. Brazil was the market that did not close to trade and the world managed to supply itself due to excellent Brazilian exports, he highlights.
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China was the highlight in the Brazilian and global meat sector, assesses the consultant. “Perhaps, if China had not purchased the volumes it purchased from Brazil in beef and pork, the situation would be quite different. However, this demand in the meat sector in Brazilian exports supported the sector's production, which supported the internal demand for soybean and corn meal”, analyzed Molinari.
Regarding supply, a small drop in the off-season in 2020, in Mato Grosso do Sul and Paraná, as well as in the United States, consolidated an export market for Brazil of close to 34 million tons. The volume was below 2019, but still at an excellent level, comments Molinari. This good flow naturally reduced domestic supply. And when the safrinha harvest began, Brazilian producers decided to retain part of the production, generating support for strong increases in cereal prices.
Thus, says Molinari, “in the face of internal exchange rate volatility, with producers unsure about developments in the midst of the pandemic, firm demand, devalued exchange rate and retention on the part of producers, corn prices reached records in reais in 2020”.
In the balance of 2020, the price of corn on the purchase basis at the Port of Santos rose from R$ 41.00 to R$ 74.00 per bag, accumulating an increase of 80.5%.
In the market available to producers, the price of corn in Campinas/CIF rose on the sales basis in the annual comparison until this Tuesday (22) of R$
49.00 to R$ 78.00 per bag, appreciation of 60% in total. In the Mogiana region of São Paulo, the cereal advanced in comparison from R$ 46.50 to R$ 78.00 per bag, an increase of 68.4%.
In Cascavel, Paraná, in the comparison for the year, the price increased from R$ 44.00 to R$ 72.00 per bag, an increase of 64.4%. In Rondonópolis, Mato Grosso, the price rose from R$ 40.00 to R$ 64.00 per bag, a year-to-date increase of 59.5%. In Erechim, Rio Grande do Sul, there was a price increase from R$ 46.00 to R$ 81.00, an increase of 78.7% in 2020.
In Uberlândia, Minas Gerais, corn prices rose during the year from R$ 49.00 to R$ 70.00 per bag, an increase of 46%. In Rio Verde, Goiás, the market had an increase in the year to date of 62.8%, going from R$ 42.00 to R$ 68.00 per bag.
Per Lessandro Carvalho (lessandro@safras.com.br) / SAFRAS Agency
