June 2, 2004

Cargill, Louis Dreyfus Brazilian Soy Shipments Blocked in China
 

Cargill Inc. and Louis Dreyfus are among trading companies whose Brazilian soybean shipments have been turned back by Chinese authorities because of allegations they are contaminated with pesticide, a Chinese official said.

At least three ships, carrying about 150,000 metric tons of soybeans, have been rejected over the past month, prompting China's quality inspection bureau to block further soy shipments from Brazil handled by Archer Daniels Midland Co., Bunge Ltd., Cargill, Louis Dreyfus and three other trading companies, said a China State Grain Administration official who didn't want to be named. Officials from Cargill, Archer Daniels and Bunge weren't immediately available to comment.

"These shipments are full of seeds that are covered in pesticides because they're meant for planting and not human consumption,'' said Chen Xitong, an official at China's quality inspection bureau. "They would be very dangerous if they were processed by our crushers'' and entered the food chain.

China banned Brazilian soybean shipments several times in the past year over sanitary problems. In November, Brazil pledged more inspections to ensure Brazilian shipments met international quality standards. Brazil, China's second-biggest soybean supplier after the U.S., shipped 6.5 million tons of the oilseed to China last year, valued at $2.2 billion.

Louis Dreyfus's chief representative in China, Tao Chen, confirmed one of the ships blocked had been chartered by the company. The soybean ban won't be lifted until the Chinese government is confident no more shipments are contaminated, Dreyfus's Chen said.

Jose Amauri Dimarzio, executive secretary of Brazil's Agriculture Ministry, is due to lead a three-man team today to the port of Rio Grande to inspect warehouses and port facilities, the ministry said in a statement on its Web site. The team is gathering material for a report to be made to China on measures Brazil will adopt to control the quality of its exports, it said.

The ministry said China blocked one more Brazilian cargo. The vessel, Eleftheria, left Santos port on April 14, carrying 61,000 tons of soybeans, the statement said.