7 Reasons Why Maize Export is a Lucrative Business Opportunity
Maize, also known as corn, is one of the most widely grown and traded crops in the world. It is a versatile crop that can be used for human food, animal feed, industrial products and biofuels. Maize export is a lucrative business opportunity for many reasons, such as:
1. High and growing demand
Maize is the third most consumed cereal after rice and wheat, with an estimated global consumption of 1.2 billion tons in 2023. The demand for maize is driven by population growth, income growth, urbanization and changing dietary preferences. Maize is also increasingly used for biofuel production, especially in the United States, Brazil and China.
2. Low production costs
Maize is a relatively low-cost crop to produce, compared to other cereals. It has a high yield potential and can adapt to different agro-ecological conditions. Maize can also benefit from intercropping and crop rotation systems, which can improve soil fertility and pest management.
3. Diversified markets
Maize exporters can access a variety of markets, depending on the quality and type of maize they produce. For example, white maize is mainly used for human food, especially in sub-Saharan Africa and Latin America, while yellow maize is mainly used for animal feed and industrial purposes, especially in Asia and Europe. Maize can also be processed into various products, such as flour, starch, oil, ethanol and bioplastics.
4. Competitive advantage
Maize exporters can gain a competitive advantage in the global market by producing high-quality maize that meets the standards and preferences of different buyers. For example, some buyers may prefer non-GMO maize, organic maize or fortified maize. Maize exporters can also differentiate themselves by offering value-added services, such as storage, transportation, packaging and certification.
5. Favorable trade policies
Maize exporters can benefit from favorable trade policies that facilitate market access and reduce trade barriers. For example, some regional trade agreements, such as the African Continental Free Trade Area (AfCFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), can create new opportunities for maize trade within and across regions. Some bilateral trade agreements, such as the United States-Mexico-Canada Agreement (USMCA) and the European Union-Mercosur Association Agreement (EU-Mercosur), can also enhance maize trade between specific countries.
6. Government support
Maize exporters can receive government support in various forms, such as subsidies, tax incentives, credit facilities, insurance schemes and extension services. Government support can help maize exporters overcome some of the challenges they face, such as price volatility, climate risks, pests and diseases, infrastructure gaps and market information asymmetry.
7. Social and environmental benefits
Maize export can generate social and environmental benefits for both the exporting and importing countries. For example, maize export can create employment opportunities, increase income levels, reduce poverty and improve food security for the exporting countries. Maize import can also diversify food sources, enhance food quality, lower food prices and reduce dependence on food aid for the importing countries. Moreover, maize export can contribute to environmental sustainability by reducing greenhouse gas emissions, conserving water resources and promoting soil health.
Maize Export: A Global Perspective
Maize (or corn) is one of the most widely grown and traded crops in the world, with an annual production exceeding 1 billion metric tons. It is a versatile crop that can be used for human food, animal feed, industrial purposes, and biofuel. In this blog post, we will examine some of the trends and challenges in the global maize market, focusing on three aspects: production, consumption, and trade.
Production: Where does maize come from?
The top five maize producers in the world are the United States, China, Brazil, Argentina, and India. Together, they account for about 75% of the global maize output. The United States is the largest producer and exporter of maize, with an estimated production of 360 million tonnes in 2022-23. China is the second-largest producer and the largest consumer of maize, with an estimated production of 260 million tonnes and a consumption of 280 million tonnes in 2022-23. Brazil and Argentina are also major exporters of maize, with estimated productions of 118 million tonnes and 51 million tonnes respectively in 2022-23. India is the fifth-largest producer and a net importer of maize, with an estimated production of 36 million tonnes and a consumption of 39 million tonnes in 2022-23.
Consumption: Who eats maize and how?
Maize is consumed in different ways depending on the region and the purpose. Globally, about 60% of maize is used for animal feed, especially for poultry, pigs, and cattle. About 15% of maize is used for human food, mainly in sub-Saharan Africa, Latin America, and some parts of Asia. Maize is consumed as a staple food in various forms, such as tortillas, porridge, bread, snacks, and beverages. About 10% of maize is used for industrial purposes, such as starch, sweeteners, ethanol, and bioplastics. The remaining 15% of maize is used for other purposes, such as seed, waste, and storage.
Trade: How does maize move around the world?
Maize is one of the most traded agricultural commodities in the world, with an estimated trade volume of 192 million tonnes in 2022-23. The main exporters of maize are the United States (67 million tonnes), Brazil (40 million tonnes), Argentina (34 million tonnes), Ukraine (30 million tonnes), and Russia (8 million tonnes). The main importers of maize are China (28 million tonnes), Mexico (18 million tonnes), Japan (16 million tonnes), the European Union (15 million tonnes), and Egypt (10 million tonnes).
The global maize market is influenced by various factors, such as supply and demand conditions, weather events, trade policies, biofuel mandates, exchange rates, and COVID-19 pandemic. In recent years, maize prices have been volatile and have reached their highest level since 2013 in May 2021. Some of the drivers behind this price surge include tight export availabilities from major exporters; robust demand from China due to its swine herd recovery from African Swine Fever; and expectations of strong global demand based on projected economic recovery from the COVID-19 pandemic in many primary import destinations.
References:
https://atlas.media.mit.edu/en/visualize/tree_map/hs92/export/show/all/1005/2016/
http://www.aae.wisc.edu/aae320/Budgets/USDA%20Corn%20Cost%20USA%20sb974-1.pdf
https://books.google.com/books?id=51XdVjsrzooC&pg=PT88
http://www.dailyherald.com/article/20130111/news/701119761/
https://link.springer.com/article/10.1007/s12571-022-01288-7
https://www.fao.org/3/cb5400en/cb5400en.pdf
https://www.statista.com/statistics/1168683/export-value-of-maize-from-tanzania/
https://www.statista.com/statistics/780322/maize-corn-export-value-france/
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