“The Chinese market is huge, [it is] the biggest potential market for Brazil,” Unem’s director Bruno Alves said during the Brazilian Association of Corn and Sorghum Producers’ (Abramilho) congress in Brasilia on Wednesday May 14.
“The Chinese market is extremely interesting because the Chinese know the value of this product and pay well. [The potential market share] is large, which requires us to be organized,” Alves added.
The potential volume of Brazilian exports to China is significantly higher than the 1.02 million tonnes of DDG/DDGS exports projected for 2024/25. As well as the 726,000 tonnes that were shipped in 2023/24.
Rapid growth in DDG export markets
The sanitary protocol agreement was signed by Brazil and China on Tuesday May 13.
“Brazilian DDG has been very sought after, and we have been able to open up several markets. We have been exporting a lot to Vietnam, New Zealand, Spain. It’s difficult to determine how much it is going to grow, but we’ve been growing a lot and its growth is expected to continue,” Alves told Fastmarkets.
Corn meal, technically called DDG/DDGS, is one of the products resulting from Brazil’s growing production of corn ethanol. It is used in animal nutrition for livestock, poultry and pig farming.
The potential export volume to China is also almost twice Brazil’s production. This amounted to 4.2 million tonnes in 2024/25.
The link between DDG markets and corn ethanol expansion
The expansion of the country’s DDG export markets is a result of the expansion of the corn ethanol industry in Brazil over the past years.
Brazilian corn ethanol production is forecast at 8.24 billion litres in 2024/25. And it could reach 10 billion litres in 2025/26, according to Unem. This would also imply an increase in DDG volumes.
“For the next ten years, our goal is to double our production capacity, to get close to 16 billion litres and, consequently, double our DDG production,” Alves said.
Corn demand and production growth expectations
In 2024/25, corn ethanol production is expected to demand 18 million tonnes of corn from the total Brazilian corn output, or 17% of the Brazilian corn supply. Abramilho projects the corn use for ethanol production at 20 million tonnes in 2025.
“We do not believe that Brazil can reach a ratio as tense as in the United States, where 40% of corn production is destined for ethanol production, precisely because of the expectation of an increase in [Brazil’s] corn supply,” Unem’s director said.
Unem expects Brazilian corn output to reach 151 million tonnes in 2033/34. But the amount destined for corn ethanol production should not surpass 30%.
Challenges and optimism for Chinese market access
There is a long way to go before the Brazilian product reaches Chinese ports. There is still no estimate of when shipments will begin because the Chinese authorities still need to qualify units. Brazil has 25 corn ethanol units operating in the country. And all of them are eligible to apply to export DDG/DDGS to China.
“We believe the process will be fast as there is a big interest from China and a huge interest from companies to participate in this market and seek validation for export,” Alves told Fastmarkets.
DDG currently represents approximately 30% of a corn ethanol plant’s turnover. “As there are more interesting markets for the product, DDG will be responsible for a bigger share in the plants’ turnover, which is extremely positive for the chain as a whole,” he added.
Abramilho president Paulo Bertolini expects access to the Chinese market to have a medium and long-term impact. This is especially the case for the viability of new corn and DDG ethanol production projects, he told Fastmarkets.
“It will allow new units to be able to count on the certainty of an international market.”
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