June 2, 2004

China Wants Direct Soy Link To Brazil Farms

Chinese authorities want to buy soybeans directly from Brazilian producers, cutting out U.S. trading companies from deals, said Blairo Maggi, governor of Mato Grosso state, Brazil's largest soybean producer, according to the local Folha de Sao Paulo newspaper.
 
However, he said Brazilian ports have no room for a Chinese company to ship soy without using trading companies, he said in a phone interview from Japan.
 
In order to improve this situation, Chinese officials and President Luiz Inacio Lula da Silva discussed investments of up to $3 billion in railway and port infrastructure in Brazil during meetings in China last week.
 
The news came as China has banned Brazilian soybean imports from seven trading companies. Late Monday, local firm Libero Trading was added to the blacklist, which includes Cargill, ADM, Louis Dreyfus Asia, Nobel Group, Irmaos Trevisan and Bianchini following the discovery of a fourth shipment contaminated with fungicide-tainted seed in China.
 
China is the principal destination for Brazilian soybeans, taking 6.1 million metric tons of local produce in 2003.
 
Local traders speculate that the ban is a ploy to renegotiate and delay shipments.