France Becomes a Key Importer of Chilean Corn
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In MY 2023/24, Post forecasts Chile’s Corn production at 632,000 MT, a 6.2 percent increase from MY 2022/23 due to higher harvested area. Post estimates yields will decrease from 11.7 MT per ha to 11.5 MT per ha due to persistent drought. Corn acreage was 51,000 hectares in 2022/2023. In MY 2023/24, due to a high domestic Corn price, the area harvested is expected to increase by 7.8 percent totaling 55,000 hectares. However, the increase in area planted remains limited by the high cost of inputs, such as fertilizers, which are mostly imported. In MY 2022/23, high input costs were the main reason the area harvested decreased to 51,000 ha despite high domestic Corn prices.
Domestic Corn prices, as well as import costs, increased consistently between January 2021 to October 2022. The cost of importing is attributed to the rise in international Corn prices during that period and increased freight costs. However, the imported Corn cost decreased with global prices and freight costs in recent months. The cost of importing Corn from the United States increased from $387 per MT in December 2021 to a peak of $516 per MT in October 2022. It then decreased to $399 per MT in January 2023. Similarly, imported Corn from Argentina went from $348 per MT in December 2021 to $454 per MT in October 2022, then decreased to $402 per MT in January 2023.
In MY 2023/24, Post projects imports to decrease by 2.2 percent and a total of 2.25 MMT due to higher Chilean production. Chile imports Corn from the United States, Argentina, Bolivia, and Paraguay to cover consumption. Domestic consumption is mainly feed for the pork and poultry industries. In MY 2021/22, Chilean imports of Corn increased by 4.19 percent from MY 2020/21 (data until January 2023).
Argentina was the leading supplier of Corn in MY 2021/22 with a 61.8 percent market share, followed by Paraguay with a 37.4 percent market share. Argentina remains very competitive in Corn prices and has a proximity advantage over other competitors, which became a critical factor due to the increase in transport costs observed in MY 2021/22. According to AgFlow data, Chile imported 0.25 million tons of Corn from Argentina in June 2023. Total imports hit 1.2 million tons in Jan-Jun 2023.
In 2021, Chile exported Corn worth $102 million, making it the 29th largest exporter of Corn in the world. In the same year, Corn was Chile’s 68th most shipped product. The leading destination of Corn exports from Chile is the United States ($50.5 million), France ($21.7 million), South Africa ($5.73 million), Italy ($5 million), and Germany ($4.32 million).
Corn Consumption in Chile
In MY 2023/24, Post forecasted feed and residual consumption would increase by 2.0 percent over MY 2022/23 and a total of 2.6 MMT due to a higher demand for feed from the pork and poultry industries. Animal feed constitutes around 90 percent of the Chilean Corn consumption in Chile. The remaining 10 percent corresponds to food and seed production. In MY 2021/22, domestic demand for pork and poultry decreased due to lower disposable income, high inflation, and a slowdown in the Chilean economy. Post estimates demand for pork and poultry to recover by MY 2023/24, thus demanding more Corn for feed. FSI consumption will remain flat at 320,000 metric tons. Total consumption will reach 2.92 MMT, a 1.7 percent increase over MY 2022/23.
In MY 2023/24, Post projects Chilean Corn stocks will decrease by 54.7 percent to 70,000 metric tons. Higher consumption from the pork and poultry industry will pull from stocks as transport costs and international prices drop, and thus there will be no need to hold reserves.
Other sources: USDA
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