This year U.S. corn exports are plunging to their lowest level in decades, down near 700 million bushels. Essentially all forecasts show a big rebound in exports in 2013/14, with the consensus near 1.3 billion bushels. That seems like a reasonable assumption. After all U.S. corn exports averaged nearly 1.8 billion bushels in the three years prior to this year. The reasoning goes that the drought in 2012 drove corn prices up so high that countries reduced imports and that situation will reverse if prices are lower for the 2013/14 season.
But there are some issues that at least need a closer look to evaluate the potential for U.S. corn exports next year and the years beyond. One is that despite the high corn prices in 2012/13, world corn trade really didn’t decline all that much. USDA puts world corn trade in 2012/13 at 96.5 million tonnes, down just 4.5 million from the previous year. That translates into a decline of just 177 million bushels in world trade, while U.S. exports dropped by 840 million bushels. That does not indicate that buyers were dissuaded by the high corn prices.
But the world trade data are a little distorted by the fact that U.S. corn imports surged by about 130 million bushels this season and without that increase, foreign trade would have fallen by about 300 million bushels. That still pales in comparison to the 840 million bushel drop in U.S. exports. So let’s take a look at what countries did significantly reduce imports year-over-year.
The biggest year-to-year decline in corn imports was in Mexico. Corn imports by Mexico in 2011/12 came in at 11.1 million tonnes, but then fell to 6.5 million tonnes this year. But the “normal” import level for Mexico is in between those two extremes. The “normal” level of corn imports by Mexico is 8.5 million tonnes over the 2006/07 through 2010/11 period. If that is normal, the 6.5 million tonnes imported this year represents a decline of about 2 million tonnes.
The situation for Egypt, the country with the second largest year-to-year change, is similar. Imports in 2011/12 came in at 7.2 million tonnes, up from the average of around 6 million tonnes in the two previous years. Egypt’s imports for this season are put at 4 million tonnes, essentially down 2 million from that average level. At least based on USDA’s current forecasts, imports by Mexico and Egypt stay below the recent average levels in 2013/14.
It does appear that imports by China are on the increase. Chinese buying rose from around 1 million tonnes in 2009/10 and 2010/11 to 5.2 million tonnes in 2011/12. Then imports fell by 2.2 million tonnes for 2012/13. A solid rebound in China’s purchases is expected for 2013/14 and imports next season could boost world trade by about 150 million bushels. Strong demand growth may force China to increase corn imports even more beyond the 2013/14 crop year.