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Brazil imports record corn, sells stocks to contain prices

SAO PAULO - To ease near record prices for corn, Brazil's government on Wednesday announced it would sell public stocks and proposed dropping import taxes for the grain, while the livestock industry said it booked imports of 500,000 metric tons t...

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SAO PAULO - To ease near record prices for corn, Brazil's government on Wednesday announced it would sell public stocks and proposed dropping import taxes for the grain, while the livestock industry said it booked imports of 500,000 metric tons through May.

The Agriculture Ministry's coordinator of grains, Silvio Farnese, said a total of 160,000 metric tons of corn from government stockpiles would be sold at local market price to small livestock producers, with a focus on the northeast and south of the country.

The ministry regularly sells public stocks at times of scarcity to ease supply and price pressures in regions with limited access to production because of high freight costs.

The ministry has not yet released a schedule for sale of the stocks.

Brazilian corn prices that hit 50 reais a 60-kg bag in the past days in Sao Paulo, the highest since early 2008, prompted the release of public stocks, but only after groups of pork and poultry producers booked 500,000 metric tons of corn imports from Argentina and Paraguay.

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Brazilian buyers booked the corn imports for delivery in April and May, the president of poultry and pork industry group ABPA Francisco Turra told Reuters on Wednesday.

Local corn prices started to back off from near-record levels due to the imports and the progress of the summer corn harvest in Brazil, according to Turra.

Agriculture Minister Katia Abreu earlier in the day proposed ending import taxes known as the PIS/Cofins on corn shipments to reduce current shortages of the grain in parts of the country.

Grain traders estimated the elimination of the tax could reduce import prices by close to 10 percent.

According to a statement from the Agriculture Ministry, Abreu sent a proposal to the Finance Ministry to suspend import taxes for corn so poultry and pork producers could have less costly access to feeds.

Brazil made its largest purchase of corn from neighboring Argentina in 15 years, booking around 340,000 metric tons, according to brokers and industry sources. The buying is not expected to persist beyond the second half of 2016, when a record winter corn harvest in Brazil is due to come onstream.

Abreu said in the statement that poultry and pork processors are facing tight corn supplies in some areas, after farmers sold most of their corn crop for export over the past several months. A weak real currency has stimulated export sales of farm commodities from Brazil.

Related Topics: CROPSCORN
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