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World corn production & Export. Issues in corn exporting countries. Impact on U.S corn prices. Please Click Your Mouse to Explore This Report. World Corn Review 2007 – interactive presentation. What countries are the world largest producers and exporters of corn?.

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Please Click Your Mouse to Explore This Report

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  1. World corn production & Export Issues in corn exporting countries Impact on U.S corn prices Please Click Your Mouse to Explore This Report World Corn Review 2007 – interactive presentation What countries are the world largest producers and exporters of corn? The latest issues of production and domestic use of corn in major exporting countries What drive the U.S corn prices up? Impact on global corn export How the U.S corn situation affect the global corn export market?

  2. World corn production & Export Issues in corn exporting countries Impact on corn prices World Corn Review 2007 – interactive presentation The U.S, China, Brazil, Mexico, and Argentina are the five largest corn producing countries Those five countries produced nearly 500 million ton in 2006 representing 72% of global corn production Impact on global corn export

  3. World corn production & Export World Corn Review 2007 – interactive presentation All five largest corn producing countries, but Mexico, are also major global corn exporters. The world is heavily rely on U.S for foreign supply of corn as the country satisfies 68% of global corn export Argentina surpassed China as a second largest corn exporter since 2003 Issues in corn exporting countries Impact on corn prices Impact on global corn export

  4. Issues in corn exporting countries World Corn Review 2007 – interactive presentation Increasing Animal Feed Production The Need to Develop Bio Fuel World corn production & Export Large supply of ethanol is necessary China Domestic Demand Pressure for Corn Impact on corn prices Impact on global corn export Less corn available for export

  5. Issues in corn exporting countries World Corn Review 2007 – interactive presentation The rising meat consumption… World corn production & Export China …has resulted in rapid growth of animal feed production Increased by more than 18% Impact on corn prices Impact on global corn export

  6. Issues in corn exporting countries World Corn Review 2007 – interactive presentation Accelerated fossil fuel consumption triggered by industrial and transportation boom… World corn production & Export While government has recently suspended further expansion of its corn ethanol industry in order to halt a rapid increase in corn prices,… Diesel Oil China Gasoline …investors and local governments continue preparing new projects. Some processors dodge policy restrictions by claiming to make alcohol. Impact on corn prices …make china in a great need to increase bio-fuel production Government set the target of 4 million ton of ethanol in 2010 Impact on global corn export

  7. Issues in corn exporting countries World Corn Review 2007 – interactive presentation World corn production & Export Ethanol and feed factors make china divert a large part of country’s corn production from export to domestic market by removing export subsidy. Even China is expected to be net corn importer by 2008 China Impact on corn prices Impact on global corn export

  8. Issues in corn exporting countries World Corn Review 2007 – interactive presentation Argentina is the second largest corn exporter since 2003. • The country has exported 69% of its corn production within 2002 – 2006 period. • Argentina’s much lower corn production level compared to that of U.S, however, make the country less powerful in absorbing any supply disruption. • The efforts to expand corn production by increasing planted area have been constrained by high transportation cost. • Normally, production for export is centered 300-400 kilometers from ports; farther distances are not as profitable. World corn production & Export Argentina Impact on corn prices Impact on global corn export

  9. Issues in corn exporting countries World Corn Review 2007 – interactive presentation The Growing Criticism Over The Use of MTBE* The Need to Develop Bio Fuel World corn production & Export Large supply of ethanol is necessary USA Impact on corn prices Domestic Demand Pressure for Corn Impact on global corn export Less corn available for export *Methyl Tertiary-Butyl Ether

  10. Issues in corn exporting countries World Corn Review 2007 – interactive presentation Despite country’s position as a largest corn exporter, nearly 90% of U.S. corn production is dedicated for domestic use. World corn production & Export Corn is massively used in industry with feed industry takes the largest share. USA Impact on corn prices Impact on global corn export

  11. Issues in corn exporting countries World Corn Review 2007 – interactive presentation U.S bio-fuel program and the growing criticism over the use of MTBE has triggered rising ethanol consumption. World corn production & Export The U.S Bio-Fuel Program The already enacted EPACT (Energy Policy Act) 2005 is expected to continue driving up U.S ethanol-based-bio-fuel production. USA Impact on corn prices EPACT set Renewable Fuel Standard (RFS) that aim at achieving 7.5 billions of gallon bio-fuel by 2012 Impact on global corn export

  12. Issues in corn exporting countries World Corn Review 2007 – interactive presentation What’s wrong with MTBE? World corn production & Export The Clean Air Act Amendments of 1990 require the use of environmental-friendly octane enhancer such as MTBE (methyl tertiary-butyl ether) and ethanol USA Since 1992, MTBE has been used at higher concentrations in some gasoline The possible hazardous groundwater contamination caused by MTBE, however, has prompted the government to consider replacing MTBE with ethanol Impact on corn prices California, New York, and Connecticut, the states that were massively use MTBE, have already switched to ethanol since 2004 Impact on global corn export

  13. Issues in corn exporting countries World Corn Review 2007 – interactive presentation The recent jump in fuel ethanol production has escalated the use of corn to produce ethanol. World corn production & Export The surge in ethanol production has accelerated growth of domestic corn use A large part and even most of the recent growth of the U.S domestic corn use has been driven by ethanol production boom USA Impact on corn prices 6.2% Total Growth 5.4% 5.7% 3.1% Impact on global corn export

  14. Issues in corn exporting countries Impact on U.S corn prices World Corn Review 2007 – interactive presentation As the U.S corn production cannot proportionally catch up with accelerating domestic corn use, corn ending stock hit the lowest level since the 1995/96 crop year World corn production & Export The anticipation of lower corn inventory has sparked the recent U.S corn price rally • Ethanol-led-demand shock is expected to create permanent increase in both domestic use and price of corn • The increase is likely to be somewhere between $1 and $2 per bushel (Paul Aho: Oct 2006) 3.89 2.22 Impact on global corn export

  15. Issues in corn exporting countries World Corn Review 2007 – interactive presentation Since nearly 70% of corn export come from the U.S, the drop in country’s corn inventory has resulted in falling world inventory of corn World corn production & Export • The global corn market is also possible to have lower U.S corn available for export in the near future. • Much of the additional corn needed for the U.S ethanol production will be diverted from country’s exports (USDA Baseline Projection 2006). The corn importing countries, therefore, are exposed to both the possible supply shortages and hike in price of corn Impact on U.S corn prices Impact on global corn export

  16. Issues in corn exporting countries World Corn Review 2007 – interactive presentation • U.S corn market situation could also have direct impact on Indonesia • The decreasing role of China as one of major corn exporting countries make Indonesia shift to Argentina • The reliance on imported corn make Indonesia vulnerable to the recent unfavorable world corn market situation • While recorded mild increase, country’s corn production is still below domestic consumption level World corn production & Export • Limited production, however, will directly cut export supply from Argentina in case of production drop due to harvest failure • Indonesia, therefore, will rely on U.S as a supplier of the last resort and it will bear the direct impact of any U.S corn market disruptions. Impact on U.S corn prices Impact on global corn export

  17. For queries please contact Ibnu Edy WiyonoEconomic & Business ResearchVice Chairman Office – Charoen Pokphand IndonesiaEmail : ibnu.wiyono@cp.co.idPhone : 62-21-6919999, Ext. 504Fax : 62-21-6922274

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