May 1, 2012

Brazil Wants to Expand Trade with China beyond Soybeans

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

During a series of meetings held in China last week, the president of the Brazilian Confederation of Agriculture and Livestock (CNA), Senator Katia Abreu, discussed the expansion of trade between the two countries. Currently, 70% of the agricultural trade between Brazil and China involves soybeans, soybean meal, and soybean oil and she feels that there are more opportunities for trade involving such products as coffee, beef, and powered milk.

Senator Abreu was in China to participate in the Brazil Forum, which is being held in conjunction with the opening of a CNA office in Beijing. CNA officials felt they needed a permanent presence in China in order to help facilitate additional Chinese investments in Brazilian infrastructure projects and to promote more Brazilian agriculture exports to China. She was there to also promote the Public-Private Partnership program (PPP) in Brazil that brings together private investments in public works projects such as barging operations, highway construction, railroad construction, and port improvements.

Brazilian officials feel that China could be a major participant in the PPP program because these types of investments can lower transportation costs and allow China to import Brazilian commodities at lower costs. In fact, Chinese businessmen and government officials are currently considering investing in several of the infrastructure projects in Brazil.

CNA will also hold a series of meetings later this year in China highlighting Brazilian agriculture including: production potential of various agricultural products, land resources, quality assurance laboratories, agribusiness, logistics, reforestation, etc.

The coordinator of the Brazil Forum meetings, Sergio de Quadros, estimates that the agricultural trade between Brazil and China could hit US$ 80 billion in 2012 and that it will continue to increase in the years ahead.