Aug 15, 2022
China Wants to Expedite Corn and Soy Meal Imports from Brazil
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
The Brazilian and Chinese governments have been working diligently in recent months to expand the agricultural trade between the two countries. Several weeks ago, they announced an agreement on phytosanitary standards to start exporting Brazilian corn to China and now they are working on similar agreements for the export of Brazilian soybean meal to China.
What is unusual is that China is pushing that these agreements be expedited so exports can start as quickly as possible. The war in Ukraine cut off China from one of its major supplies of corn forcing it to look elsewhere for corn supplies. China could turn to the U.S. for additional corn imports, but they are hesitant to do so given the increased tensions between the two countries. The logical alternative is to look for expanded trade between Brazil and China.
Brazilian corn exports to China - Initially, it was expected that the first corn exports to China would start in 2023, but the two countries reached an agreement sooner than expected and Brazilian corn exports may start before the end of 2022.
China has tried to become self-sufficient in corn, but they have not accomplished that goal. In 2021, 70% of China's corn imports came from the United States with 30% from Ukraine. In 2022, estimates are that China may have to import as much as 25-30 million tons of corn and Brazil is poised to supply some of that market.
Brazilian soybean meal exports to China - Brazil and China are currently negotiating phytosanitary standards for the export of soybean meal to China. China has already announced the requirements for companies to be licensed to export corn to China and the licenses may be accepted as soon as next week. Similar licenses for the export of soybean meal are expected soon.
China has expressed their desire to ramp up these imports as soon as possible to avoid potential shortages for their domestic hog and poultry operations. The export of Brazilian corn and soybean meal to China could start before the end of 2022.
Part of the phytosanitary standards for soybean meal exports into China is the prohibition of certain pests such as cowpea seed beetle (Callosbruehus maculatus), Mexican bean weevil (Zabrotes subfasciantus), and red fire ants (Solenopsis invicta). The soybean meal may not contain other seeds or pests that are quarantined in China.
For their part, Brazilian soybean crushers and corn producers indicated that if China follows through with imports of soybean meal and corn, they will expand their crush capacities and corn production.