China Resumes Soybean Imports from Five Brazilian Facilities

Five Brazilian facilities that China had embargoed in January of this year due to sanitary concerns have now been authorized to resume soybean exports to the Asian country. The approval has been in effect since April 25.

A document received by Brazil’s Ministry of Agriculture’s Secretariat of Trade and International Relations states that the facilities have been cleared and that Chinese authorities are “in agreement with the technical actions presented by Brazil.”

The embargo was imposed after irregularities in soybean shipments from five facilities belonging to ADM do Brasil, Cargill S.A., Terra Roxa Comércio de Cereais, Olam Brasil, and C.Vale Cooperativa Agroindustrial were detected.

Chinese authorities cited, for instance, the presence of pesticide-coated soybeans, which is a standard procedure for seeds treated before planting but is not acceptable for soybeans intended for human or animal consumption.

Sources suggested that there may have been a mix-up between grain and seed shipments, described as a “lapse” rather than a serious risk to the Brazil-China trade relationship.

“Soybean export volumes are large, and the same level of care must be applied,” said a Brazilian government technician. China’s GACC had also identified the presence of quarantine pests in some of the cargoes. The Brazilian government deemed China’s actions “normal” without political or commercial implications.

The expectation was that the issue would be resolved within a few months. Beijing’s official decision mentioned a two-month embargo, but the companies could not trade with China for three months. The impact on Brazil’s total soybean exports to China was negligible, as more than 1,700 Brazilian facilities are authorized to sell soybeans.

The announcement comes just ahead of a major agricultural trade mission to China. President Luiz Inácio Lula da Silva will also visit China on May 12–13 to attend the China-CELAC Forum (Community of Latin American and Caribbean States) and is expected to hold a bilateral meeting with Chinese President Xi Jinping. Agriculture Minister Carlos Fávaro and Embrapa president Silvia Massruhá will join the trip.

Infrastructure

The Brazilian Confederation of Agriculture and Livestock (CNA) hopes for progress in negotiations for Chinese investments in Brazil’s infrastructure, one of the main bottlenecks affecting the country’s agribusiness sector.

“In addition to trade, we’re also focused on attracting investment. For agribusiness, this means logistical infrastructure for transport and storage. China could be a key partner in this area,” said Sueme Mori, CNA’s Director of International Relations, during an event on Tuesday (May 6).

She pointed out that Brazil still has a major storage gap, which hurts competitiveness during bumper harvest years. “If you have a mega-harvest, you have to ship it immediately; you can’t wait for better prices, which creates huge truck lines,” she explained.

Another potential area for collaboration is the development of multimodal transport structures, which remain underdeveloped in Brazil relative to the scale of its agricultural production and cargo transport needs.

Mori says this topic has been on the Brazil-China negotiation agenda since at least mid-2019.

Advancing talks around funding have become even more important recently, not only because China may increase its demand for Brazilian goods amid the U.S.-China trade war, but also because geopolitical tensions have limited global investment options.

“Countries are holding back on investments, which is why the IMF has lowered its global growth outlook—because of this [geopolitical] instability,” Mori noted.

In this context, Brazil’s projects must be on China’s radar when it makes investment decisions.

Bilateral Relations

Mori said the trade mission to China already includes “concrete announcements” that will be made during the trip. She didn’t disclose details but confirmed that Brazil is negotiating market openings or sales expansions for various agricultural products.

Around 150 representatives from different sectors of Brazil’s agribusiness industry will travel to China for meetings on market access, export growth, and discussions on sanitary and tariff-related issues.

Minister Fávaro has previously stated that Brazil is ready to offer its agricultural products to China to fill gaps left by the United States due to the ongoing trade war.

Commenting on this, Mori said Brazil is fully capable of stepping in. “We’re highly productive and very competitive. And on top of that, we’re a reliable partner,” she concluded.

Source: Globo Rural

Sharing is caring!