Exports of Brazilian maize are expected to strengthen from June onwards as Brazil harvests this year’s second maize crop, commonly known as “safrinha”. Due to Brazil’s large harvest, this year’s exports will likely be sold at a lower price than maize from other exporters.
As the largest maize importer, China stands to benefit from affordable Brazilian maize and has already cancelled orders for more expensive imports from the US. In November 2022, China approved the import of Brazilian maize, previously banned due to phytosanitary concerns.
A strong maize harvest in Brazil will be positive for panamax and supramax ships. It will help mitigate the loss of volumes from other exporters, due to not only its added volumes but also its longer average haul.
Brazil, the US, Argentina, and Ukraine together account for around 85% of global maize exports. Supplies from Ukraine have been restricted since the start of the war due to limited export capacity and a smaller harvest in September 2022. The harvests in Argentina and the US were both affected by drought, further limiting global exports.
Reflecting supply concerns, maize prices surged during the start of the war in Ukraine but have since started to cool. The Black Sea grain agreement and more recently the prospects of a large harvest in Brazil have significantly contributed to price stabilisation.
Under the Black Sea grain agreement, Ukraine has exported almost eight million tonnes of maize so far in 2023. However, the agreement could end on 18 May, which could further strain global maize supplies and drive prices upwards. Ukraine could continue to export maize through its rivers and its neighbour’s ports, but volumes would be significantly lower.
Despite Brazil’s contribution, maize exports are currently estimated to fall 11% in 2023. However, higher exports of other animal feed products such as soybeans and soybean meal could offset the loss. Overall, we expect global exports of grains to stagnate this year.
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