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Brazil moves closer to China corn exports as Beijing approves traders

Brazil moves closer to China corn exports as Beijing approves traders
© Reuters. FILE PHOTO: Farmers collect corn at a plantation in Maringa, Brazil, July 13, 2022. REUTERS/Rodolfo Buhrer

 

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By Dominique Patton and Ana Mano

BEIJING/SAO PAULO (Reuters) -Chinese customs updated its list of approved Brazilian corn exporters on Wednesday, a move a Brazilian agriculture official said could jumpstart sales of corn to the world’s second-largest economy.

The approvals could reshape global trade flows and result in fewer sales for farmers in the United States, the world’s top corn supplier. China relied on the United States and Ukraine for most of its corn supplies but Russia’s invasion of Ukraine has disrupted exports.

“It is a good alternative for Brazil, having (more) markets to send products to,” said Glauco Bertoldo, an inspections director for vegetable products at Brazil’s agriculture ministry.

He said in an interview the list of approved Brazilian facilities that can export corn to China may be updated to include more units in coming weeks.

The new list on the website of China’s General Administration of Customs included 136 corn export facilities, including facilities owned by Archer-Daniels-Midland Co,, Bunge (NYSE:BG) Ltd, Cargill, Louis Dreyfus Company and Cofco International.

Cofco declined to comment. Other exporters did not immediately respond to requests for comment.

Once China starts buying corn from Brazil, traditional Brazilian corn importers such as Spain and Egypt could shift some of their purchases to the United States.

“There will probably be some horse trading. But China is going to end up buying more corn from South America and less from the United States,” said Craig Turner, a grain broker with StoneX.

Small Chinese imports from Brazil may begin soon, but larger shipments are not expected until the next harvest begins in early 2023, he added.

Beijing and Brasilia had signed a protocol for exporting corn from Brazil to China in 2014 but little trade had happened due to complex inspection requirements.

The countries agreed to a revised protocol during talks in May, just months after Russia invaded Ukraine.

China customs also published a list of 14 Brazilian facilities approved to export soymeal to the country, including those owned by Bunge Ltd and Olam, according to a document posted on customs website.

Olam did not immediately respond to a request for comment.

Demand for soymeal however is expected to be limited, given China’s large domestic production capacity, said traders and analysts.

China is expected to import 18 million tonnes of corn in the 2022/23 crop year that began in October, according to the agriculture ministry.

China’s imports from Ukraine have dwindled to less than 2,000 tonnes in September this year, leaving it reliant on the U.S. for the bulk of its overseas supplies.

Source: Investing.com

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