SAO PAULO, (Reuters) – Domestic demand for corn is expected to grow six percent in Brazil in 2020, driven by increasing corn-ethanol production and buying from the meat industry, which uses the cereal to make livestock feed, Dutch bank Rabobank projected on Thursday.
That outlook would likely reduce exports from one of the world’s top corns exporter next year, opening room for the United States and other players, Rabobank’s grain analyst Victor Ikeda said.
“Corn ethanol producers alone are expected to demand 2.5 million tonnes more corn in 2020, as several projects start production,” Ikeda said, estimating total demand for corn in Brazil reaching 68 million tonnes.
The bank, which specializes in agricultural financing, expects Brazilian corn exports to fall to around 30 million tonnes next year from a record near 40 million tonnes in 2019.
As a result of the positive outlook, prices have risen in the Brazilian market, boosting farmers’ forward sales.
Ikeda said corn forward sales are above the levels seen for this time of the year in recent years.
He expects planted area for the second corn crop, Brazil’s main crop of the cereal, to grow to 13.4 million hectares (33.1 million acres) in 2020 versus 12.5 million hectares in 2019.
Total corn area (first and second crops) are seen growing 5% in the 2019-20 Brazilian grain season, to 18.4 million hectares, with total production again topping 100 million tonnes as it did in the previous season.