June 21, 2004

 

 

China Hopes To Resolve Soy Dispute With Brazil

 

China's President Hu Jintao has expressed his wish to resolve a dispute over the current Chinese ban on imports of Brazilian soy products that could cost the South American country hundreds of millions of dollars, Brazil's government said.

 

Hu in a message to Brazilian President Luiz Inacio Lula da Silva said he hoped that "the question of soy trade could be resolved appropriately through friendly consultations between the competent units of the two countries," Lula's spokesman Andre Singer said late Friday.

 

Since May, China has banned Brazilian soy imports from 23 trading companies - among them from the multinational companies Cargill Inc. and Archer-Daniels-Midland Co. (ADM) - after finding small amounts of fungicide-contaminated seeds mixed in with thousands of tons of beans grown for human and animal consumption.

 

The agriculture ministry says the ban has blocked about 90% of Brazil's soy- product exports to China.

 

Brazil is the world's second biggest soy producer after the U.S., and soy products are Brazil's top export item, with China its biggest customer. In 2003, Brazil exported 6.1 million metric tons of soybeans to China, earning US$1.3 billion.

 

The Chinese soy embargo comes at a time of rapidly rising trade between China and Brazil and has caused consternation among Brazilian soy exporters.

 

Carlo Lovatelli, president of the Brazilian Vegetable Oil Industries Association (Abiove), said Wednesday that instead of health concerns, the embargo was motivated by the fact that stockpiles in China were high, and prices had nose-dived after Chinese importers purchased the soybeans.

 

According to international health standards, there can be no more than three fungicide-tainted seeds per kilogram (2.2 pounds) of beans. Lovatelli said all the embargoed shipments complied with this norm.

 

The soy exporters' suspicions were fueled by the fact that on June 15, the Chinese government vetoed entry visas for a Brazilian delegation that had planned to visit China to explain the situation and negotiate a resumption of Brazilian soy shipments to China.

 

In his message to Lula, the Chinese president said his country would now welcome a delegation of technicians from Brazil's agriculture ministry in an effort to resolve the problem.

 

Brazil's government was certain the issue could be resolved quickly, Singer added.

 

A delegation of two top officials from Brazil's agriculture ministry and a toxicology specialist from Abiove will arrive in Beijing on Sunday. They were scheduled to hold talks with China's quarantine ministry on Monday and with the agriculture ministry Tuesday, the government news agency Agencia Brasil said.