In 2020, global corn (maize) production and consumption significantly increased. The rise in the price of grain, however, made the raw corn-based production of bioethanol unprofitable, resulting in the closure of some distilleries.
Key trends and insights
Global corn production surged from 1,409М tonnes in 2019, to 1,435М tonnes in 2020 (IndexBox estimates). Brazil (+7M tonnes), South Africa (+1.2M tonnes) and India (+1.2M) tonnes indicated the most substantial increase in output.
Global corn exports saw a 6% rise, to 168.2М tonnes (IndexBox estimates). In 2020, global corn prices increased substantially, from $170 per tonne in March 2020 to $240-280 per tonne in March 2021. Argentina retained the lowest competitive export prices in 2020 ($239 per tonne, FOB).
The high corn prices resulted in inflated prices and lower demand for bioethanol (derived from raw corn materials). Consequently, several bioethanol plants have been forced out of production. According to the Renewable Fuels Association (RFA), approx. 20 out of the 200 ethanol production facilities in the U.S. remain idle; a further 20 have cut production.
In the period to 2030, the global corn market is set to expand to 1.978Mtonnes (IndexBox estimates). Increasing corn consumption in the food sector driven by steady population growth remains the key development factor in terms of market expansion. Corn-based biofuel production remains unprofitable, against the traditional cheap energy products.
The market for alternative fuels may yet see significant development, thereby increasing the demand for corn, should environmental standards become more stringent and a carbon tax on greenhouse emissions be imposed.
China, U.S. and Brazil consume more than half of global corn production
The countries with the highest volumes of maize consumption in 2019 were China (523M tonnes), the U.S. (322M tonnes) and Brazil (60M tonnes), with a combined 64% share of global consumption. Mexico, Indonesia, Argentina and India lagged somewhat behind, together accounting for a further 9.2%.
In value terms, the largest maize markets worldwide were China ($170.8B), the U.S. ($106B) and Mexico ($22.5B), with a combined 60% share of the global market. Indonesia, Brazil, India and Argentina lagged somewhat behind, together comprising a further 8.2%.
The countries with the highest levels of maize per capita consumption in 2019 were the U.S. (978 kg per person), Argentina (619 kg per person) and China (359 kg per person).
Brazil to lead in exports
Brazil (43M tonnes), Argentina (29M tonnes), Ukraine (27M tonnes) and the U.S. (26M tonnes) represented roughly 79% of total exports of maize in 2019. The following exporters – Romania (4.6M tonnes), France (3.7M tonnes), Russia (3.1M tonnes), Hungary (3M tonnes), Paraguay (2.7M tonnes) and Bulgaria (2.6M tonnes) – together made up 12% of total exports.
In value terms, the U.S. ($8.9B), Brazil ($7.3B) and Argentina ($6B) were the countries with the highest levels of exports in 2019, together comprising 62% of global exports. These countries were followed by Ukraine, France, Romania, Hungary, Russia, Bulgaria and Paraguay, which together accounted for a further 28% (IndexBox estimates).
In 2019, the average maize export price amounted to $229 per tonne, approximately reflecting the previous year. Overall, the export price, however, showed a pronounced contraction. The pace of growth was the most pronounced in 2017 an increase of 13% year-to-year.
The global export price peaked at $301 per tonne in 2013; however, from 2014 to 2019, export prices stood at a somewhat lower figure.
IndexBox report: https://www.indexbox.io/blog/global-maize-market-2021-key-insights/