Rabobank predicts increased demand for corn

UTRECHT, NETHERLANDS – Global corn consumption is expected to increase by 25% over the next decade, according to a report released by Rabobank on December 16. The Netherlands-based financial services company also predicts that the global corn trade will show even stronger growth, boosted by growth in animal protein production, geopolitical tensions and corn shortages resulting from adverse weather conditions and constraints on the market. gains in area and yield.

With consumption set to increase, volumes exported by major corn producers are also expected to increase, according to the report. Brazil, Argentina, Ukraine and the United States will benefit the most from this increase in global growth as all have additional production potential, and Brazil is well positioned to take the lead.

“Over the next decade, South America will take the lead in corn area growth, while yields will play a major role in growing corn production in the United States and Ukraine through 2030, ”said Marcela Marini, Senior Analyst, Grains and Oilseeds, Rabobank. “The availability of the area, the yield potential, the financial margins and the infrastructure to deliver maize to importing countries will be the main drivers of maize growth among these players. We estimate that maize production in the four major exporting countries will increase by 159 million tonnes to reach 682 million tonnes by 2030. ”

Marini predicted that Brazil will take the lead in growing corn production and exports over the next 10 years. The dual use of the land, with a soybean crop and a safrinha maize crop harvested within 12 months from the same field, allows the safrinha area to increase over the established soy area without requiring a expansion exclusively for corn sowing. This gives Brazilian corn production good financial margins and unique sustainable value, she said.

The report noted that land availability, yield growth and financial results will be key factors in ensuring that maize production in Brazil, Argentina and the United States continues to increase. However, sustainability will be a key topic for major corn destinations, requiring changes in practices on farms and in the supply chain, and impacting the competitiveness of corn over the next decade.

Marini said sustainable production will be closely followed by important destinations and even some private companies that have pledged not to source grains or oilseeds from recently deforested areas to ensure more sustainable corn production.

“New practices and even certifications that could be replicated for corn will be demanded by destinations, and farmers and the corn supply chain will be forced to quickly adopt new practices that could change the dynamics and competitiveness of the market. corn market in the future, ”said Marini.

Traceability and guarantees that a product has been produced in a sustainable manner could even change the dynamics of commodity prices in years to come, she said.

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