Reduced exports of grain and soya from South America are predicted in 2012. After increasing again to a record 125mt (million tonnes) last year, two-thirds higher than the volume seen a decade earlier, this year’s total could be lower, reflecting the severe impact on crops of drought and excessive heat during the growing period.
Calculations prepared in April are still provisional. Forecasts based on harvests under way in Brazil and Argentina are likely to change, as results become clearer. Currently, overall 2012 grain and soya exports are expected to be over 5mt or 4% below the previous year’s volume, and there seems to be potential for this estimate to be revised downwards.
Global import demand for soyabeans and meal remains buoyant, while corn and wheat import demand is expanding. But other key export suppliers are competing strongly for markets, and South America’s export availability is reduced. Consequently, activity in Brazil’s and Argentina’s loading ports could slacken through the main export season, which has already begun, and some disadvantages for bulk carrier employment could ensue.
 
EXPORTS OVERVIEW
During 2012 exports of wheat, corn and other coarse grains, plus soyabeans and meal, from Argentina and Brazil, are expected to total 119.4mt, as shown in the table. This estimate is 5.3mt or 4% below the 2011 total. Most of the predicted weakness is concentrated in the soya component.
Several separate US Dept of Agriculture forecasts published in mid-April have been incorporated in this overview of prospects. Slightly differing marketing year periods are used for the various cereals and oilseeds exports in the two main South American supplying countries. These marketing period variations mainly reflect differences in the timing of harvests.
There are two particularly notable changes envisaged in 2012, compared with last year. Firstly, lower corn exports from Argentina. Secondly, much larger reductions in soyabeans and meal shipments from both Argentina and Brazil.
 
PROSPECTS FOR WHEAT AND CORN
South America’s annual cereals and oilseeds production cycle starts with wheat in Argentina. The Argentine wheat harvest completed in early 2012 was about 10% lower than the preceding crop, at 14.5mt despite a larger area cultivated. Persistent early-season dry weather adversely affected yields. But exports in the marketing year ending November 2012 could be maintained at the previous year’s 9.5mt.
Corn and sorghum production in Argentina’s harvests this
year is estimated at 25.5mt, about 9% lower. Benefits from a marginally larger crop area were more than offset by the sharply negative effect of inadequate rainfall. In the marketing year ending February 2013, exports are forecast at 15.8mt (mostly consisting of 14.0mt corn), a 2m or 13% reduction. In the past few years, wheat and corn sales from Brazil
became a more visible part of the picture. Production of wheat is relatively small, at just under 5–6mt annually, of which exports could be steady at 2mt in 2012. The much larger corn output (derived from two separate crops) is likely to increase by 8% to an estimated 62mt this year. In the marketing period ending March 2013, corn exports could be 2.1mt (25%) higher, at 10.5mt.
 
SOYABEANS AND MEAL OUTLOOK
Last year, South America’s soyabeans and meals sales to markets around the world edged upwards, by 1mt, to a record high 86.5mt volume. Growth over an entire decade was 72%, a remarkable achievement, amid expanding output, strong competitiveness, and growing global requirements, especially in China. This trend has greatly benefited bulk carrier employment. The 2012 soya export quantity is currently forecast at 81.6mt, a 6% decline.
Although the soyabeans crop area in Brazil is still rising, adverse weather has been a factor during the recent growing season. A La Nin~a-induced drought in the southern states has reduced production by an estimated 13%, to 66mt. Beans and meal exports in the 2012/13 marketing period ending January 2013 could fall by 3.3mt (7%), to 44.9mt according to USDA’s calculations.
Argentina’s soyabeans harvest also seems set to decline quite
sharply by about 8%, to an estimated 45mt, because of excessive heat and abnormally dry weather which affected the crop in the early stages of development. In the marketing year ending March 2013, beans and meal exports could be reduced by 4%, to 36.7mt.
 
BUOYANT GLOBAL IMPORT DEMAND
As well as export availability, South America’s grain and soya sales to foreign markets this year will be determined by the evolution of global import demand and by competition from other suppliers. Brazil and Argentina usually compete strongly with other countries. Expanding import requirements for wheat, corn and soya in many areas currently provides a favourable market outlook.
Further ahead there are uncertainties, of course, for both wheat and coarse grains, and soyabeans and meal trade. Beyond the 2012 third quarter prospects are less clear. Summer northern hemisphere importing countries’ domestic grain harvests, which are not yet accurately predictable, will affect their foreign purchases of both grain and soya.
One especially significant element is China’s requirements. The latest signs point to a continued upwards trend in imports of soyabeans into China, which now comprise over one-third of global soya trade. Chinese purchases could reach 55mt this marketing year, and corn purchases, although on a much smaller scale at an estimated 6mt, seem poised for further growth.
 
Richard Scott