April 27, 2012

Brazil Agriculture Agency Opening New Office in Beijing

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

The economic ties between Brazil and China continue to expand. As an illustration, the Agriculture and Livestock Confederation of Brazil (CNA) has announced that they will be opening an office in Beijing in 2013. The purpose of the office is to help arrange for Chinese investors especially those wishing to invest in various infrastructure projects in Brazil as well as working to increase the volume of Brazilian agricultural products sold in China. The announcement was made by the president of CAN, Senator Katia Abreu, and she also noted that the new office would be similar to an existing office in Beijing of the Brazilian Export and Investment Promotion Agency (Apex).

One of the goals of CNA is to help bring in Chinese investors interested in working on for Brazilian infrastructure projects. Investments in ports, highways, railroads would get raw materials and commodities to China at a lower cost. In 2011, China imported US$ 14.6 billion of agricultural products from Brazil, which represented one third of the total exports. CNA can make a strong argument that investments in logistics is compensated for by reduced transportation costs.

Joining the Senator at the announcement was Brazil's ambassador to China, Clodoaldo Hugueney, and various Chinese diplomats and businessmen. The Chinese attendees expressed an interest in a continuing dialogue concerning projects important to both countries. As a result, CNA will conduct seminars later this year in China to discuss potential projects involving logistics, infrastructure, reforestation projects, livestock operations as well as other topics.

In her remarks, Senator Abreu also commented on the urgent need to increase world agricultural production by the year 2050 when the world's population will increase to 9 billion people. The Food and Agriculture Organization of the United Nations (FAO) has already stated that Brazil will need to increase their productivity by 40%, which is the largest increase of any major agricultural producing country.

The Brazilian research agency, Embrapa, feels that Brazil will be able to meet the future demand for food through better utilization of existing farmland without the need for further deforestation. In fact, Embrapa scientists have stated that Brazil's grain production could triple and its beef production could double by the year 2050 by using existing technology to convert degraded pastureland into additional grain production.