(Bloomberg) -- Brazil has overtaken the US as the leading shipper of corn to China, just a year after the world’s top importer gave the go-ahead for supplies from the South American country.

Cargoes from Brazil amounted to 8.79 million tons in the 11 months through November, or 40% of the overall total of 22.18 million tons, according to customs data. US shipments came in at 6.50 million tons, almost 30% of the total, and down by more than half from a year earlier. 

Once dependent on the US and Ukraine, China sought to diversify suppliers as purchases surged, a move that coincided with a record crop in Brazil. Chinese imports have exceeded 20 million tons for three straight years as the country looked to replenish stockpiles, while satisfying demand from the livestock feed and processing industries.

“Brazil had a bumper harvest and their corn was cheap,” said Cherry Zhang, an analyst with Shanghai JC Intelligence Co. “The countries also have friendly relations.” Traders booked a large amount of the grain from the country earlier this year and now those cargoes are arriving, she said. Overall corn imports in November were the highest on record in data going to back to 2005.

Beijing signed a deal with Brazil last year to buy the country’s corn, with the first shipment arriving in January. Imports from Brazil in December are expected to total at least 1.5 million tons, and they are likely to stay high in the new year, according to Shanghai JC estimates. 

Lower corn prices in Chicago and logistical issues restricting Brazilian exports could start to push traders back to US supplies, traders and analysts said. 

Whichever origin is more attractive, suppliers will have to grapple with a weak domestic market. Corn futures on the Dalian Commodity Exchange are down 16% in 2023, and at their lowest level in more than three years. 

“Pessimism is pervading the market,” China brokerage Holly Futures said in a note. “Farmers face a lot of pressure selling their grain, while downstream traders are reluctant to build stockpiles.” 

Even though China has an enormous appetite for the grain, the main consumers — livestock farmers and processors — are struggling to make profit, casting a shadow over the strength of demand going forward. 

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