Apr 02, 2025
Domestic Corn Prices Skyrocket in Brazil due to Tight Supplies
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Domestic corn prices have skyrocketed in Brazil due to tight supplies, increased domestic demand, and concerns about safrinha corn production. Approximately 20 million tons of corn in Brazil will be used in 2025 to produce ethanol, which is up from zero eight years ago. There are numerous corn ethanol facilities under construction in Brazil with more in the planning stages, so the amount of corn used for ethanol production will continue to increase for the foreseeable future.
The price of corn in Mato Grosso reached R$ 71.26 per sack (approximately $5.68 per bushel) last week, which was the highest price in almost three years when it hit R$ 70.79 per sack (approximately $5.64 per bushel) in June of 2022 during the peak of the pandemic according to the Mato Grosso Institute of Agricultural Economics (Imea).
Compared to the same period last year, corn prices are up 109%. The increased price reflects reduced production in 2023/24 and increased demand for corn to produce ethanol.
Approximately 20% of Brazil's ethanol is now produced using corn as the raw material. This is up from zero percent in June of 2017 when the first corn-based ethanol facility opened in the city of Lucas do Rio Verde in the state of Mato Grosso.
Brazil has 22 operational corn ethanol plants with 12 additional facilities under construction and another nine have received the green light for construction according to a research note published by the investment bank Citi. Corn ethanol production is expected to almost double to 16 billion liters by 2032.
Mato Grosso is Brazil's largest corn producing state and the epicenter Brazil's corn ethanol production. Using corn to produce ethanol has many advantages over sugarcane in remote locations such as Mato Grosso due to its longer storage life and lower cost of transportation.
Below are a series of charts concerning corn ethanol production in Brazil curtesy of Mr. Tarcilo Rodrigues of AgRural. The chart below on the left shows the production of ethanol from sugarcane (orange bar) and corn (yellow bar). The blue line shows the growth of corn ethanol production from zero in 2017/18 to the current 20%. The chart on the right shows the domestic consumption of corn for ethanol production (red) and for other uses (yellow).
The graph below shows the average spot corn price in the city of Sorriso in central Mato Grosso for 2025 (orange), 2024 (blue), and five-year average (yellow). Sorriso is the largest soybean and corn producing municipality in Brazil.
