Brazil has extended its import duty suspension on soy, corn, soybean meal and soybean oil, until the end of the year, as the country seeks to slow inflation driven by rising global commodities prices.
The Gro Brazil Food Price Index, whose real-time values will be made available to our customers in the coming weeks, is up 46% year-on-year.
In October 2020, Brazil announced that it would suspend the import tariffs on corn, soybeans, soy meal, and soy oil from countries outside the Mercosur trade bloc in an effort to help reduce food prices. In the first three months of 2021, Brazil imported 211,846 tonnes of soybeans, and 680,821 tonnes of corn, double the corresponding period last year.
A suspension of tariffs until year-end implies that imports from outside the Mercosur region will be needed to fill the supply gap until the 2021 harvest, which could benefit US producers. Tight US supplies place great emphasis on the 2021 corn and soybean growing season in the US. Gro’s corn and soybean yield models for the US provide daily updates of yield estimates once the growing season begins.
Grain and oilseed prices in Brazil continue to rise due to strong export demand and the continued devaluation of the real against the US dollar. Additional upward pressure on corn prices are due to heightened domestic demand and concerns regarding the country’s safrinha crop (second corn planting). Follow Gro’s Brazil Corn Yield Forecast Model for daily updates of corn yield estimates at the district, province, and national levels.
Brazil’s actions are the latest effort by a national government to curb domestic food inflation. While other countries have tried to slow outflows of agricultural commodities to ease domestic price pressures, Brazil is attempting to encourage inflows.
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