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Update: Brazil Approves GMO Corn Imports from U.S.

Two months after Brazil’s Ministry of Agriculture asked the country to temporary lift restrictions, Brazil was approved to import genetically modified corn from the U.S.

The National Technical Commission of Biosafety (CTNBio) approved the importation of three varieties: the genetically modified corn MON87427 and MON87460 from Monsanto, and the transgenic corn 3272 by Syngenta. The information was confirmed to Successful Farming-Brazil by the press office of the Ministry of Science, Technology, and Innovation.
The decision was awaited with anxiety by the poultry and hogs industries, which are facing a serious crisis because of the increased cost of corn, the main raw material for animal feed. With the breakdown of the second corn crop in 2015/2016 and record exports last year, the product offering backed off and the shortage of corn caused a significant increase in cereal prices in the domestic market. With the approval of the CTNBio, the poultry and hog sectors expect to import U.S. corn with more competitive prices.

Corn imports increased 532%

Brazil imported 1.41 million tons of corn between January and September 2015, according to Ministry of Industry, Foreign Trade, and Services (MDIC). This is a 532% increase in imports compared with the 224,300 tons of corn imported in the same period of the last year. “We imported a lot, but as a whole, when compared with the Brazilian consumption, it is not a huge amount,” says Ana Luiza Lodi, a corn analyst at INTL FCStone consulting.

Corn Suppliers

Of the total imported in 2016, 657,500 tons were Argentinean corn and 761,000 tons came from Paraguay. Only 19.5 tons were imported from the U.S.

According to Lodi, the volume is low because the varieties of GM corn grown by American producers were not approved in Brazil. With the decision of CTNBio, this number should increase. “The approval will increase the U.S. corn entering Brazil, but we cannot predict what volume these imports will reach," says Lodi.

According to the analyst, the logistic cost will be assessed with caution. The states of Santa Catarina and Paraná, major producers of poultry and pigs,t require a lot of corn and may continue opting for corn from Argentina and Paraguay. “The sea freight to import U.S. corn is more expensive than in Argentina and there is also the port cost,” says Lodi. However, there are regions that can focus on the U.S. “I believe the northeast region might be the major benefiter of the import approval. In addition to being closer to the U.S., the northeast consumes more corn than it produces,” she adds.

Poultry and pork producers want cheaper corn

Poultry and pig farmers believe that the increase in corn imports will minimize the cereal supply crisis. “Corn is still expensive because there is also a lot of speculation in the market. This approval was what we needed, we need more corn supply,” says Losivanio Luiz de Lorenzi, president of Swine Breeders Association of Santa Catarina (ACCS). “Now everyone is excited waiting for the price of corn to fall on the domestic market.”

From July to September, the association imported 2 tons of corn from Paraguay. The average price of imported corn was US$190 per ton, while the purchase of Brazilian corn during this period would cost about US$240 per ton. According to Lorenzi, the ACCS will continue importing corn only from Paraguay, because the logistics cost is lower and the purchased volume is small.

However, he believes that the U.S. purchases have potential to grow. “Large companies are going to import American corn. This decision is good for JBS, BRF, Aurora, and Pamplona,” says Lorenzi. “The decision will balance the market and benefit independent producers, as well.”

Estimated import

In August, the Brazilian Association of Animal Protein (ABPA) estimated the import in 1 million tons of corn from the U.S. “The U.S. is having a great harvest and considerable surpluses. In addition, estimates of purchase prices made there are more attractive than those in our domestic market, even in Mercosul countries. It will be a great relief for the entire sector,” says the chief executive of ABPA, Francisco Turra.

The decision of CTNBio has 30 days to be refuted. If there is no appeal, after this period, the corn import will be released. The Foreign Trade Chamber authorized the importation of up to 1 million tons of U.S. corn, free of charges for imports by the end of 2016, which may facilitate the U.S. corn entering the country.

Written by Darlene Santiago, Editor of Successful Farming-Brazil

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