Can Argentina Lose the Second Rank in Global Corn Export?
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In 2021/22, Argentinian farmers covered 7.9 million ha with Corn, the cereal’s largest cultivated area on record. Córdoba sowed 34%, Buenos Aires 26%, Santa Fe 13%, Entre Ríos 6% and La Pampa 4%. The Corn region, while more or less in the same general section as the wheat belt, is principally situated near the Parana River in the lower part of the Province of Santa Fe, and in the northern part of the Province of Buenos Aires.
Unfortunately, in 2021/22, a new drought curtailed the potential of this great productive bet, limiting the yields of early Corn initially. Despite adverse weather conditions, a 2021/22 harvest of 47.7 million tons is forecast, which, if materialized, would be the fourth-best in history. This estimate entails an 8% fall compared to the 2020/21 result, equivalent to 4.3 million tons less.
For the upcoming 2022/2023 Corn season, in which planting will begin in the coming weeks, Buenos Aires Grains Exchange forecasts an area of 7.5 million hectares. That would be smaller than the current season, due to a drop in the profitability of the crop and low soil moisture.
Argentinian Corn Export Market
The country is a major global exporter of grains. While the local food and energy industries consume 30% of what is harvested in the country, the remaining 70% is traded as grain in foreign markets. The clear export profile of the chain has its raison d’être in an extraordinary local productive capacity that is combined with a relatively lower domestic demand from the meat and biofuel industries.
In the 2020/21 crop season, Argentina surpassed in exports to Brazil and was consecrated as the second bidder worldwide, behind the United States, with a sales value of USD9.1 billion in 2021 (up 18% by 2020). It represents 12% of Argentinian exports. With exports of more than 40 million tons, Argentina supplied 22% of the world Corn trade (185.8 million tons).
In the 2021/22 trade year, significant growth in global Corn trade is expected to amount to 203.7 million tons, while local exports are forecast at 33.5 million tons, below what was exported in the previous season. Consequently, Argentina will lose market share this crop season, with a supply of only 16% of international external demand. It is also forecast that the country will once again position itself as the third global supplier of Corn, surpassed by the United States and Brazil.
The main markets for Argentinian Corn will continue to be Asia, South America, and Africa. In 2020/21, Argentina supplied 22% of Asian external demand with 18.5 million tons, 42% of South American demand with 6.9 million tons, and 14% of African demand with 5.7 million tons.
According to the AgFlow data, Vietnam led Argentina’s export market with 5 million tons of Corn in January-August 2022, followed by Algeria (4.1 million tons), South Korea (3.9 million tons), Peru (2.9 million tons), and Egypt (2.9 million tons). The following other importers are Saudi Arabia, Malaysia, Chile, Morocco and Japan.
As for Corn sales exports, ADM firm leads with 5.89 million tons of export sales registered. It is followed by Cargill (5.24 million tons), COFCO (4.68 million tons), Bunge (4.25 million tons) and the local cooperative ACA (3.54 million tons), which strongly increased its share in the last two crop seasons, after the launch of its port facility in Timbúes. Totally, Argentina shipped 34.3 million tons of Corn abroad in 2020/2021.
The value exported by the Corn chain in the calendar year 2022 is forecast at USD9,4 billion. Given global uncertainty that impacts trade flows and FOB prices, the value exported by the Corn complex is forecast to represent 13% of the value exported by Argentina in 2022.
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