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Market Talks: Brazil's increasingly corn demand may enhance DDG output | Argus Media

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class="HeroBanner_titleAndDescription__0Cj9_"><a class="qa-banner-breadcrumb BannerBreadcrumb_bannerBreadcrumb__hHMz7 h3" href="/es/news-and-insights/energy-and-commodity-podcasts"><svg xmlns="http://www.w3.org/2000/svg" width="8.662" height="13.958"><path fill="none" stroke="#fff" stroke-linecap="round" stroke-width="2" d="m7.662 12.958-6.22-5.979L7.663 1"></path></svg>Energy and commodity podcasts</a><h1 class="qa-banner-title">Market Talks: Brazil&#x27;s increasingly corn demand may enhance DDG output</h1></div></div></div></div></div></div></div><div class="component small grey "><div class="component-content"><div class="PageSubnavigation_container__yH3q7 qa-subnavigation-bar container"><div class="PageSubnavigation_outer__ocRn_"><div class="PageSubnavigation_bar__Cf50a"><a href="#overview" class="qa-subnavigation-anchor PageSubnavigation_item__mBuP2 cta bar " title="">Overview</a><a href="#podcast" class="qa-subnavigation-anchor PageSubnavigation_item__mBuP2 cta bar " title="">Podcast</a><a href="#products" class="qa-subnavigation-anchor PageSubnavigation_item__mBuP2 cta bar " title="">Key products</a><a href="#spotlight" class="qa-subnavigation-anchor PageSubnavigation_item__mBuP2 cta bar " title="">Spotlight content</a><button type="button" class="PageSubnavigation_showMore__2Z47G cta "></button><a href="#podcast" class="qa-subnavigation-cta PageSubnavigation_cta__pnmT7 cta bubble" title="">Listen to the podcast now</a></div></div><div class="PageSubnavigation_drawer__lxQUi grey " style="left:0px"><div class="container"><div class="PageSubnavigation_drawerInner__Q_bJs"><div class="PageSubnavigation_drawerItems__AwukY"><a href="#overview" class="qa-subnavigation-anchor PageSubnavigation_item__mBuP2 cta bar " title="">Overview</a><a href="#podcast" class="qa-subnavigation-anchor PageSubnavigation_item__mBuP2 cta bar " title="">Podcast</a><a href="#products" class="qa-subnavigation-anchor PageSubnavigation_item__mBuP2 cta bar " title="">Key products</a><a href="#spotlight" class="qa-subnavigation-anchor PageSubnavigation_item__mBuP2 cta bar " title="">Spotlight content</a></div><a href="#podcast" class="qa-subnavigation-cta PageSubnavigation_cta__pnmT7 cta bubble" title="">Listen to the podcast now</a></div></div></div></div></div></div><div class="component white"><div class="component-content"><div class="container"><ul class="PageTags_meta__5q4bN sub-heading h3"><li class="PageTags_metaItem___eXos">19 de noviembre de 2024</li><li class="PageTags_metaItem___eXos">Market<!-- -->: <!-- -->Fertilizers</li></ul></div></div></div><div class="component component-padding PageIntroduction_pageIntroduction__BoFDD white" id="overview"><div class="component-content"><div class="container"><div class="PageIntroduction_row__DH0rm row"><div class="col-12 col-lg-8"><div class="qa-pageintroduction-section"><div class="PageIntroduction_description__hOYK7"><div class="qa-pageintroduction-textfield"><p>The increase of domestic demand for corn, boosted by the corn ethanol sector, may rise the production and exports of DDG, a rich-protein product that may benefit animal feed sector. Join Renata Cardarelli, editor of the Argus Brazil Grains and Fertilizer publication, and Maria Albuquerque, a member of the Argus Brazil Grains and Fertilizer publication, in a talk about this market expansion and forecasts for output and exports for the coming years</p></div></div></div></div></div></div></div></div><div class="component component-padding InlineFrame_inlineFrame__i73xz white" id="podcast"><div class="component-content"><div class="container"><h2>Listen now</h2><div class="InlineFrame_description__K4can"></div><div></div></div></div></div><div class="component component-padding grey"><div class="component-content"><div class="container"><div class="row"><div class="col-12 col-lg-7"><h2 class="qa-accordion-title section-heading">Transcript</h2></div></div><div><div class="qa-accordion-items Accordion_item__wwVZ1 "><button type="button" aria-expanded="false" aria-controls="accordion-2378f1da-ba5d-4451-adc3-f5f85eacc82f-panel-0" id="accordion-2378f1da-ba5d-4451-adc3-f5f85eacc82f-button-0" class="Accordion_button__6ui4x"><h3 class="qa-accordion-item-title Accordion_heading__GP7y0 large cta">View transcript</h3></button><div id="accordion-2378f1da-ba5d-4451-adc3-f5f85eacc82f-button-0" role="region" aria-labelledby="accordion-2378f1da-ba5d-4451-adc3-f5f85eacc82f-button-0" class="qa-accordion-item-content Accordion_description__7Jnfh"><p><strong>RC: Hello and welcome to &lsquo;Market Talks&rsquo;- a series of podcasts presented weekly by Argus addressing the events impacting commodities and the energy sector in Brazil and around the world.</strong></p> <p><strong>I am Renata Cardarelli, editor of the Argus Brazil Grains and Fertilizer publication and in today's episode I will talk to Maria Albuquerque, intern for the Argus Brazil Grains and Fertilizer publication, about the increase of dried distillers' grain - DDG - output in Brazil, boosted by the rising of domestic demand for corn in the country.</strong></p> <p><strong>RC: Welcome, Maria! First, could you explain to us what is DDG and its advantages?</strong></p> <p><strong>MA:</strong> Hi, Renata, sure! DDG - dried distillers' grain - is the major coproduct of corn ethanol production.</p> <p>Distilling and fermenting corn results in residual materials that later go through a drying process, resulting in DDG.</p> <p>DDG is considered a rich-protein fiber commodity which may replace corn, cottonseed, soybean meal and other meals in the animal feed sector, as it offers a market advantage.</p> <p>That is because DDG necessarily occurs from corn ethanol output, becoming an available coproduct that would not be used for other purposes. By using DDG in the animal fattening process, corn can be left to other sectors, such as exports.</p> <p><strong>RC: Very interesting, Maria! What is the outlook of DDG output for Brazil in 2024?</strong></p> <p><strong>MA:</strong> Brazil is set to produce 5.2mn metric tonnes of DDG this year, according to investment bank Itau BBA estimates. That volume would represent a 28pc increase from the 4.1mn t in 2023 and would be more than double from the 2.9mn t produced in 2022.</p> <p>The increased production expected by Itau BBA is also in line with corn ethanol association Unem&rsquo;s forecast, which sets Brazil's yearly DDG output at around 6.5mn t by 2032.</p> <p><strong>RC: That is a significant rise! How is it related to the increase in domestic demand for corn?</strong></p> <p><strong>MA:</strong> The recent rise in domestic demand for corn in Brazil is related to the hike in corn ethanol production, which, again, leaves DDG as a coproduct.</p> <p>Brazil&rsquo;s 2023-24 corn demand is projected at 84.2mn t, according to national supply company Conab.</p> <p>That is a 5.8pc increase from the 2022-23 season and a 35pc rise from five years ago in the 2018-19 season. By the end of the year, around 17.3mn t of corn may be shifted for ethanol output, accounting for 20.5pc of the domestic demand. In 2023, demand for corn from the ethanol sector was of 13.4mn t.</p> <p>The volume of corn destined to ethanol production for 2025 is forecast at 19.4mn t, up by 12pc from 2024.</p> <p>In the 2023-24 cycle, Brazil produced about 6.3bn liters of corn ethanol, accounting for 19pc of the country&rsquo;s total ethanol production, according to the sugarcane and bioenergy industry union Unica. That represents an increase of 3.4 percentage points from the 2022-23 season.</p> <p>In the 2013-14 crop, ten years ago, the share of corn ethanol in the Brazilian ethanol market was less than 1pc.</p> <p>Itau BBA expects Brazil to produce around 7.8bn l of corn ethanol in 2024-25, which would represent a 25pc hike from the 2023-24 cycle. Production in 2025-26 is set to reach 8.7bn l, an 11pc rise from a year prior.</p> <p>Currently, Brazil has 21 corn ethanol units in operations, with four new projects set to begin operating until the end of the year, which means volumes may increase even more in the next years.</p> <p><strong>RC: Interesting! That rise in corn ethanol production will support even more the DDG sector. Does Brazil have enough demand to absorb all this expected DDG production?</strong></p> <p><strong>MA:</strong> Yes, Renata! Brazil has a strong demand for animal feed feedstocks. For example, it is the second largest poultry producer and the major exporter. As for pork, Brazil is the fourth largest producer and exporter, according to association of animal proteins ABPA. The country will also produce a record 10.2mn t of beef in 2024, up by 7.4pc from the prior year, and export up to 3.6mn t, a 18pc increase from 2023 exports, according to Conab.</p> <p>Brazil produced around 42mn t of animal feed in the first half of 2024, up by 1.4pc from the first half of last year, according to the Brazilian animal feed association Sindiracoes. Forecasts point to a total of 86mn t produced by the end of the year, which would represent a 2.4pc rise from 2023.</p> <p>Considering only the replacement of corn with DDG, southern Parana state has the biggest potential to become the major domestic market consumer of DDG, according to market participants. Parana would be followed by Sao Paulo, Minas Gerais, Mato Grosso and Goias states.</p> <p>Furthermore, around 3.5mn t &mdash; or 85pc &mdash; of Brazil's DDG output in 2023 was targeted for domestic consumption, according to Itau BBA projections. For 2024, expectations point to a domestic consumption of 4.3mn t of DDG, an almost 23pc increase from the previous year.</p> <p><strong>RC: Interesting, Maria! So, the higher supply of DDG could be an advantage for Brazil, as it would increase the availability of feedstocks for animal feed. Looking to the external market, what is Brazil&rsquo;s role in that sector?</strong></p> <p>MA: Brazil's DDG export market is still comparatively new, but already shows a considerable increase. The first Brazilian shipments of DDG started in 2020, with small volumes sent to Turkey and the UK. But exports were suspended in 2021 following the covid-19 pandemic. They resumed in 2022, totaling 279,000t, according to corn ethanol association Unem.</p> <p>Itau BBA expects DDG exports to reach 744,000t in 2024, a 22pc increase from 600,000t in 2023.</p> <p>Vietnam was the largest importer of Brazilian DDG last year, accounting for 43pc of shipments. Brazil also sent DDG to China, Indonesia, Thailand, Spain and New Zealand.</p> <p>Brazil's ministry of agriculture authorized DDG exports to Colombia and Morocco on 10 September. That follows government efforts to globally promote the ethanol chain as an alternative to fossil fuels under energy transition initiatives.</p> <p>Brazil's agency of exports and investments promotions, Apex Brasil, and Unem firmed a partnership in 2023 to boost DDG shipments by 2025, presenting the product as an efficient high-protein alternative to animal feed production.</p> <p><strong>RC: So, considering this new export market opening for Brazilian DDG, the country&rsquo;s importance in this segment is likely to rise in the short term.</strong></p> <p><strong>Let's keep an eye on the next moves in this new market. Thank you for the information, Maria!</strong></p> <p><strong>This and other episodes of our podcast are available on the Argus website at <a href="https://www.argusmedia.com/pt/hubs/podcasts/falando-de-mercado">www.argusmedia.com</a></strong></p> <p><strong>Visit the page to follow the events that affect global commodity markets and understand their developments in Brazil and in Latin America. We'll be back soon with another edition of &ldquo;Market Talks&rdquo;. 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Join Renata Cardarelli, editor of the Argus Brazil Grains and Fertilizer publication, and Maria Albuquerque, a member of the Argus Brazil Grains and Fertilizer publication, in a talk about this market expansion and forecasts for output and exports for the coming years\u003c/p\u003e"}}},{"uid":"5a30f88c-9a53-48c4-9545-7e2b8f6c7ca5","componentName":"InlineFrame","dataSource":"/sitecore/content/ArgusMedia/MainSite/Home/News and insights/Energy and commodity podcasts/Falando de Mercado Alta da demanda por milho deve elevar producao de DDG no Brasil/Page Data/Podcast embed","fields":{"FrameHTML":{"value":"\u003ciframe title=\"Market Talks: Brazil's increasingly corn demand may enhance DDG output\" allowtransparency=\"true\" height=\"150\" width=\"100%\" style=\"border: none; min-width: min(100%, 430px);height:150px;\" scrolling=\"no\" data-name=\"pb-iframe-player\" src=\"https://www.podbean.com/player-v2/?i=d2knq-1742acc-pb\u0026from=pb6admin\u0026pbad=0\u0026share=1\u0026download=1\u0026rtl=0\u0026fonts=Arial\u0026skin=1\u0026font-color=auto\u0026logo_link=episode_page\u0026btn-skin=3\" loading=\"lazy\"\u003e\u003c/iframe\u003e"},"Title":{"value":"Listen now"},"Description":{"value":""},"AnchorID":{"value":"podcast"},"EnableSiteSearch":{"value":true}}},{"uid":"759b76bf-d913-49f5-9ec2-407ece29e73b","componentName":"Accordion","dataSource":"/sitecore/content/ArgusMedia/MainSite/Home/News and insights/Energy and commodity podcasts/Falando de Mercado Alta da demanda por milho deve elevar producao de DDG no Brasil/Page Data/Transcript","params":{"Theme":"Grey"},"fields":{"data":{"datasource":{"type":"AccordionCustom","title":{"jsonValue":{"value":"Transcript"}},"description":{"jsonValue":{"value":""}},"anchorID":{"value":""},"children":{"results":[{"type":"AccordionItemCustom","title":{"jsonValue":{"value":"View transcript"}},"description":{"jsonValue":{"value":"\u003cp\u003e\u003cstrong\u003eRC: Hello and welcome to \u0026lsquo;Market Talks\u0026rsquo;- a series of podcasts presented weekly by Argus addressing the events impacting commodities and the energy sector in Brazil and around the world.\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eI am Renata Cardarelli, editor of the Argus Brazil Grains and Fertilizer publication and in today's episode I will talk to Maria Albuquerque, intern for the Argus Brazil Grains and Fertilizer publication, about the increase of dried distillers' grain - DDG - output in Brazil, boosted by the rising of domestic demand for corn in the country.\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRC: Welcome, Maria! First, could you explain to us what is DDG and its advantages?\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eMA:\u003c/strong\u003e Hi, Renata, sure! DDG - dried distillers' grain - is the major coproduct of corn ethanol production.\u003c/p\u003e\n\u003cp\u003eDistilling and fermenting corn results in residual materials that later go through a drying process, resulting in DDG.\u003c/p\u003e\n\u003cp\u003eDDG is considered a rich-protein fiber commodity which may replace corn, cottonseed, soybean meal and other meals in the animal feed sector, as it offers a market advantage.\u003c/p\u003e\n\u003cp\u003eThat is because DDG necessarily occurs from corn ethanol output, becoming an available coproduct that would not be used for other purposes. By using DDG in the animal fattening process, corn can be left to other sectors, such as exports.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRC: Very interesting, Maria! What is the outlook of DDG output for Brazil in 2024?\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eMA:\u003c/strong\u003e Brazil is set to produce 5.2mn metric tonnes of DDG this year, according to investment bank Itau BBA estimates. That volume would represent a 28pc increase from the 4.1mn t in 2023 and would be more than double from the 2.9mn t produced in 2022.\u003c/p\u003e\n\u003cp\u003eThe increased production expected by Itau BBA is also in line with corn ethanol association Unem\u0026rsquo;s forecast, which sets Brazil's yearly DDG output at around 6.5mn t by 2032.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRC: That is a significant rise! How is it related to the increase in domestic demand for corn?\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eMA:\u003c/strong\u003e The recent rise in domestic demand for corn in Brazil is related to the hike in corn ethanol production, which, again, leaves DDG as a coproduct.\u003c/p\u003e\n\u003cp\u003eBrazil\u0026rsquo;s 2023-24 corn demand is projected at 84.2mn t, according to national supply company Conab.\u003c/p\u003e\n\u003cp\u003eThat is a 5.8pc increase from the 2022-23 season and a 35pc rise from five years ago in the 2018-19 season. By the end of the year, around 17.3mn t of corn may be shifted for ethanol output, accounting for 20.5pc of the domestic demand. In 2023, demand for corn from the ethanol sector was of 13.4mn t.\u003c/p\u003e\n\u003cp\u003eThe volume of corn destined to ethanol production for 2025 is forecast at 19.4mn t, up by 12pc from 2024.\u003c/p\u003e\n\u003cp\u003eIn the 2023-24 cycle, Brazil produced about 6.3bn liters of corn ethanol, accounting for 19pc of the country\u0026rsquo;s total ethanol production, according to the sugarcane and bioenergy industry union Unica. That represents an increase of 3.4 percentage points from the 2022-23 season.\u003c/p\u003e\n\u003cp\u003eIn the 2013-14 crop, ten years ago, the share of corn ethanol in the Brazilian ethanol market was less than 1pc.\u003c/p\u003e\n\u003cp\u003eItau BBA expects Brazil to produce around 7.8bn l of corn ethanol in 2024-25, which would represent a 25pc hike from the 2023-24 cycle. Production in 2025-26 is set to reach 8.7bn l, an 11pc rise from a year prior.\u003c/p\u003e\n\u003cp\u003eCurrently, Brazil has 21 corn ethanol units in operations, with four new projects set to begin operating until the end of the year, which means volumes may increase even more in the next years.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRC: Interesting! That rise in corn ethanol production will support even more the DDG sector. Does Brazil have enough demand to absorb all this expected DDG production?\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eMA:\u003c/strong\u003e Yes, Renata! Brazil has a strong demand for animal feed feedstocks. For example, it is the second largest poultry producer and the major exporter. As for pork, Brazil is the fourth largest producer and exporter, according to association of animal proteins ABPA. The country will also produce a record 10.2mn t of beef in 2024, up by 7.4pc from the prior year, and export up to 3.6mn t, a 18pc increase from 2023 exports, according to Conab.\u003c/p\u003e\n\u003cp\u003eBrazil produced around 42mn t of animal feed in the first half of 2024, up by 1.4pc from the first half of last year, according to the Brazilian animal feed association Sindiracoes. Forecasts point to a total of 86mn t produced by the end of the year, which would represent a 2.4pc rise from 2023.\u003c/p\u003e\n\u003cp\u003eConsidering only the replacement of corn with DDG, southern Parana state has the biggest potential to become the major domestic market consumer of DDG, according to market participants. Parana would be followed by Sao Paulo, Minas Gerais, Mato Grosso and Goias states.\u003c/p\u003e\n\u003cp\u003eFurthermore, around 3.5mn t \u0026mdash; or 85pc \u0026mdash; of Brazil's DDG output in 2023 was targeted for domestic consumption, according to Itau BBA projections. For 2024, expectations point to a domestic consumption of 4.3mn t of DDG, an almost 23pc increase from the previous year.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRC: Interesting, Maria! So, the higher supply of DDG could be an advantage for Brazil, as it would increase the availability of feedstocks for animal feed. Looking to the external market, what is Brazil\u0026rsquo;s role in that sector?\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eMA: Brazil's DDG export market is still comparatively new, but already shows a considerable increase. The first Brazilian shipments of DDG started in 2020, with small volumes sent to Turkey and the UK. But exports were suspended in 2021 following the covid-19 pandemic. They resumed in 2022, totaling 279,000t, according to corn ethanol association Unem.\u003c/p\u003e\n\u003cp\u003eItau BBA expects DDG exports to reach 744,000t in 2024, a 22pc increase from 600,000t in 2023.\u003c/p\u003e\n\u003cp\u003eVietnam was the largest importer of Brazilian DDG last year, accounting for 43pc of shipments. Brazil also sent DDG to China, Indonesia, Thailand, Spain and New Zealand.\u003c/p\u003e\n\u003cp\u003eBrazil's ministry of agriculture authorized DDG exports to Colombia and Morocco on 10 September. That follows government efforts to globally promote the ethanol chain as an alternative to fossil fuels under energy transition initiatives.\u003c/p\u003e\n\u003cp\u003eBrazil's agency of exports and investments promotions, Apex Brasil, and Unem firmed a partnership in 2023 to boost DDG shipments by 2025, presenting the product as an efficient high-protein alternative to animal feed production.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eRC: So, considering this new export market opening for Brazilian DDG, the country\u0026rsquo;s importance in this segment is likely to rise in the short term.\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eLet's keep an eye on the next moves in this new market. Thank you for the information, Maria!\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eThis and other episodes of our podcast are available on the Argus website at \u003ca href=\"https://www.argusmedia.com/pt/hubs/podcasts/falando-de-mercado\"\u003ewww.argusmedia.com\u003c/a\u003e\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eVisit the page to follow the events that affect global commodity markets and understand their developments in Brazil and in Latin America. We'll be back soon with another edition of \u0026ldquo;Market Talks\u0026rdquo;. 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