7 Reasons Why Corn Export is Booming in 2024
Corn is one of the most widely cultivated crops in the world, with a global production of around 1.2 billion metric tons in 2022. It is also a major commodity in international trade, with an estimated export volume of 172 million metric tons in 2022/23. In this article, we will explore some of the reasons why corn export is booming in 2022, and which countries are leading the market.
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1. High demand from China.
China is the largest importer of corn in the world, with an expected import volume of 28 million metric tons in 2022/23. China’s demand for corn has increased significantly in recent years, due to its growing population, urbanization, income growth, and animal feed consumption. China’s domestic corn production is not sufficient to meet its demand, so it relies heavily on imports from other countries, especially the United States, Brazil, and Ukraine.
2. Favorable weather conditions.
The main corn-producing regions in the world have experienced favorable weather conditions in 2022, resulting in high yields and quality of corn. The United States, Brazil, Argentina, and Ukraine are the top four exporters of corn worldwide, accounting for about 73% of the global export volume in 2022/23. These countries have benefited from abundant rainfall, moderate temperatures, and low pest and disease pressure during the growing season, which have boosted their corn output and export potential.
3. Competitive prices.
Corn prices have been relatively low and stable in 2022, compared to previous years. The average closing price of corn worldwide was $5.5 per bushel in 2022, down from $6.4 per bushel in 2021 and $8.6 per bushel in 2012. The low prices have made corn more attractive and affordable for importers, especially those who are facing high food inflation or currency depreciation in their domestic markets.
4. Diversified markets.
Corn exporters have diversified their markets in 2022, by expanding their trade relations with new or emerging importers. For example, Brazil has increased its corn exports to Egypt, Iran, Vietnam, and Morocco; Argentina has boosted its corn shipments to Algeria, Saudi Arabia, South Korea, and Colombia; Ukraine has grown its corn sales to Turkey, Indonesia, Malaysia, and Thailand; and France has enhanced its corn exports to Spain, Italy, Portugal, and Germany.
5. Increased use of biofuels.
Corn is not only used for human consumption and animal feed, but also for producing biofuels such as ethanol and biodiesel. The global demand for biofuels has increased in 2022, due to the rising environmental awareness, energy security concerns, and government policies that support the use of renewable energy sources. Corn-based ethanol is one of the most widely used biofuels in the world, especially in the United States, Brazil, China, and India.
6. Improved logistics and infrastructure.
Corn exporters have improved their logistics and infrastructure in 2022, by investing in new or upgraded facilities that enhance their storage capacity, transportation efficiency, and quality control. For example, the United States has built new or expanded existing grain terminals along the Gulf Coast and the Pacific Northwest; Brazil has developed new or improved existing ports and railways in its northern and southern regions; Argentina has modernized its port facilities and road networks; and Ukraine has upgraded its grain elevators and railcars.
7. Trade agreements and policies.
Corn exporters have also benefited from various trade agreements and policies that facilitate their market access and competitiveness in 2022. For example, the United States has signed the Phase One trade deal with China that includes a commitment from China to increase its purchases of U.S. agricultural products; Brazil has ratified the free trade agreement with the European Union that eliminates tariffs on most agricultural goods; Argentina has lowered its export taxes on corn from 12% to 9%; and Ukraine has maintained its zero export duty on corn.
How Corn Export Trends Reflect Global Demand
Corn is one of the most widely produced and consumed grains in the world, with an estimated production of 1.2 billion metric tons in 2022/23. The global demand for corn is driven by various factors, such as food, feed, fuel, and industrial uses. In this blog post, we will explore how the trends in corn export reflect the changes in global demand for this versatile crop.
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The Top Corn Exporters and Their Markets
According to Statista, the top corn exporters in 2022/23 are Brazil, Argentina, Ukraine, France, Romania, and Poland, with the United States leading the pack with an export volume of about 42 million metric tons. These countries account for more than 80% of the global corn trade, and their main markets are China, Japan, Mexico, Egypt, South Korea, and Iran.
The United States is the largest producer and exporter of corn in the world, with a market share of about 30%. The U.S. corn exports are mainly driven by the demand for animal feed and ethanol production in China, which is the largest importer of corn in the world. China’s corn imports have surged in recent years due to its growing livestock sector and biofuel policies. According to the U.S. Department of Agriculture (USDA), China imported 28 million metric tons of corn from the U.S. in 2022/23, up from 7 million metric tons in 2019/20.
Brazil is the second-largest exporter of corn in the world, with a market share of about 20%. Brazil’s corn exports are mainly driven by the demand for animal feed and ethanol production in Japan, Mexico, Egypt, and South Korea. Brazil has a competitive advantage in corn production due to its favorable climate and land availability, which allows it to harvest two crops per year. According to the USDA, Brazil exported 53 million metric tons of corn in 2022/23, up from 39 million metric tons in 2019/20.
Argentina is the third-largest exporter of corn in the world, with a market share of about 14%. Argentina’s corn exports are mainly driven by the demand for animal feed and ethanol production in Iran, Vietnam, Algeria, and Saudi Arabia. Argentina has a competitive advantage in corn production due to its low production costs and high yields. According to the USDA, Argentina exported 33 million metric tons of corn in 2022/23, down from 38 million metric tons in 2019/20.
The Future Outlook of Corn Export
The global demand for corn is expected to continue to grow in the coming years, as more countries increase their consumption of meat, dairy products, and biofuels. According to the USDA, the global corn trade is projected to reach 200 million metric tons by 2030/31, up from 164 million metric tons in 2022/23. The main drivers of this growth are China, India, Indonesia, Nigeria, and Ethiopia.
The main challenges facing the global corn export market are climate change, trade policies, and price volatility. Climate change poses a threat to corn production and quality, as it can affect rainfall patterns, temperature levels, pest infestations, and crop diseases. Trade policies can affect the flow of corn across borders, as different countries impose tariffs, quotas, subsidies, or sanctions on corn imports or exports. Price volatility can affect the profitability and stability of corn producers and exporters, as it can be influenced by supply and demand shocks, currency fluctuations, or speculation.
To overcome these challenges and seize the opportunities in the global corn market, corn exporters need to adopt strategies such as diversifying their markets, improving their productivity and efficiency, investing in research and innovation, enhancing their quality and sustainability standards,
and strengthening their trade relations.
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