Apr 15, 2010
Brazil And China Want To Insure Continued Good Relations
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
While China's president, Hu Jintao, is in Brazil meeting with Brazilian officials, the Brazilian Ministry of Agriculture wants to make sure that there is no chance of a trade dispute breaking out between the two countries. The Minister ordered inspectors to double check that all the agricultural commodities being loaded for China to make sure the cargos meets or exceeds the standards set by the Chinese government. They certainly don't want a repeat of the trade dispute that is ongoing between China and Argentina.
This is Jintao's second visit to Brazil. During his first visit to Brazil in 2004 there was a temporary suspension of soybean shipments from Brazil to China due to what the Chinese called excessive amounts of fungicides in the soybeans. At the time, Brazilian officials suspected that the excess fungicide was just an excuse to break the contracts in order to lower the price of the soybeans. The issue was resolved quickly and since then the trade relations between the two countries has been good. China is the principal destination of soybeans exported from Brazil.
The current dispute between China and Argentina involves trace amounts of solvents found in soybean oil. On April 1st, China established more ridged standards for the solvent dropping the allowable amount of solvent from 300 parts per million to 100 parts per million. Current soybean oil produced in Argentina cannot meet the new standard, but Argentine officials suspect that the new standard is in retaliation to prior restrictions imposed by the Argentine government on Chinese products.