Prices increase almost 10 percent in September

Brazilian corn prices moved up in September, given the lower supply during the off-season period. The better demand by the livestock sector was also a positive factor (pastures normally get smaller in September).

Governmental auctions and good exports contributed to reduce the domestic supply as well. According to Secex (Foreign Trade Secretariat), Brazilian corn exports totalized 379.1 thousand tones in September this year, up more than 20 times the volume registered in September 2005.

The ESALQ/BM&F Index for corn (Campinas city, SP, area of consumption, trades between companies) increased 9.21 percent in relation to the last day of August, averaging 8.72 dollars per bag of 60 kilos in September 29.

In September, corn prices received by growers increased 5.8 percent. In trade between companies, the increase was of 7.6 percent, considering all the areas consulted by Cepea.

More and more countries around the world pay attention on the production of ethanol from corn. This time, Argentina, fifth major corn producer and the biggest exporter in the world, turned focus on that.

To produce ethanol from corn, Americans are determinate to subsidy their industry. The question is if Argentina can do the same. It is also important to know if this country will receive incentives to export the production to US.

In Brazil, ethanol is produced from sugarcane, in a very competitive structure. There is no reason for this country produce ethanol from corn at this moment.

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