Dec 17, 2009
Agricultural Trade Between Brazil and China Continues To Expand
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Trade relations between Brazil and China continue to expand especially in the area of agricultural commodities. In addition to soybeans and soybean oil, China is a major buyer of Brazilian sugar, orange juice, and cotton.Trade relations between Brazil and China continue to expand especially in the area of agricultural commodities. In addition to soybeans and soybean oil, China is a major buyer of Brazilian sugar, orange juice, and cotton.
Soybeans are Brazil's principal agricultural export and China is the main buyer of Brazilian soybeans. From January through November of 2009, Brazil exported 28.1 million tons of soybeans, which was 15% more than the 15.93 million tons exported during the same period a year earlier. Nearly 16 million tons of those exports (57% of the total) were distended for China. Indications are that Chinese purchases of Brazilian soybeans will remain strong, at least through early 2010. In contrast to increased soybean purchases, China has actually reduced its imports of Brazilian soybean oil during the same period. From January through November of 2009, China imported 515 thousand tons of Brazilian soybean oil compared to 690 thousand tons a year earlier.
In addition to increased imports of soybeans, the Chinese have also expressed increased interest in other agricultural products from Brazil as well. Sugar is a prime example. From January through November of this year China imported US$ 59.8 million dollars worth of Brazilian sugar as compared to US$ 13.47 million last year, or an increase of nearly 300%. Orange juice exports to China have also increased this year. During the first eleven months of 2009, China imported US$ 53.14 million dollars worth of Brazilian orange juice compared to US$ 48.84 million last year, or a 9% increase. Cotton exports to China have also increased from US$ 18.78 to US$ 41.34 million during the same period.
As Brazil continues to expand its agricultural production, farmers and exporters are concerned about the strength of the Brazilian currency. The Brazilian currency has appreciated over 30% during 2009 and the agricultural sector is very concerned that it's continued strength could reduce Brazil's competitiveness in the agricultural markets. For it's part, China has expressed interest in financing infrastructure projects in Brazil that could reduce transportation costs and thus reduce the price of products destined for the Chinese market.