Brazil-China joint ventures could boost soymeal trade

Chinese and Brazilian companies could form soy-processing joint ventures as a way for Latin America’s largest economy to export more processed soymeal to its top buyer of raw soybeans, a senior Chinese diplomat serving in Brazil said.

Chinese firms overwhelmingly process soybeans in domestic plants rather than buying soymeal directly from Brazil, but companies will choose whatever gives them the best profits, said Qu Yuhui, ministercounselor in charge of political affairs at the Chinese embassy in Brasilia.

“If a Chinese and a Brazilian company together found a joint venture in Brazil to process soybeans, that would be a good choice for both sides’ profits,” he said, adding that such a partnership could ease the burden of Brazilian logistics costs.

Still, Qu said there are no discussions currently for China to give Brazil a soymeal quota with a lower import tax.

Chinese investment in Brazil jumped in 2017 to a seven-year high, stoking discussion and debate over bilateral relations ahead of the Brazilian presidential election in October.

He said China and Brazil would continue to work toward mutual development regardless of who wins the election, adding that the countries’ two-way trade is expected to grow 25 percent to $110 billion in the next two to three years.

Qu said it is too early to say if USChina trade conflicts will have an impact on China-Brazil trade, which was already growing quickly before the current spat.

In addition to booming demand for Brazilian soy and corn, Qu said growing Chinese consumption will boost trade in fruits and beef.

The surge in bilateral trade has not been without friction. China imposed anti-dumping measures on Brazilian chicken in June, while a sugar tariff has weighed on Brazil’s exports of the sweetener to China.