Incertainty. That’s the perfect word to describe the moment we are living. World is in constant change and we know nothing. In a blink of an eye or in the speed of a twitter, Sunday’s mood can be affected, mainly when it comes from Mr. Trump. As we are following, it seems trade war between China and US will remain for more time than expected. If or when they agree in a deal, one thing can be assured: it completed change the global trading commerce.
In Brazil, after a soybean’s boom last year, when we exported more than 83 million tons, the scenario is completely different now. Why? It is all about China! In 2018, after trade war, Brazil became the biggest supplier of soybeans to China. We had record premium prices: surpassing 2 dollars if compared with CBOT prices.
China bought more beans than needed and did their “homework”. In 2019, a surprise, but not a good one: hog’s fever. Last year, their total pork herd was 684 million. The disease killed at least 20% until now. It has caused Chinese to recalculate routes and increased business in Europe, main supplier of hogs to China until now.
What we should do next?
Soybeans exports will decrease at least 15 million tons in 2019, confirmed Agriculture Ministry. “It is needed to find new buyers, from Europe, for example, said Brazil Agriculture Minister, Tereza Cristina, that is going to a China mission this week. Main objective is improve credibility and try to open trade discussions, as Meat exports. Nowadays, only 5% of Brazil meat goes to China and just 65 plants are authorized to sell to them. “We need to explore this window of opportunity”, said Ag. Minister, Tereza Cristina, in a event in FIESP ( SP Industry Federation). “Brazil is not the country of the future, it is the country of the present!”, she complemented.
The biggest consumer of grains of the world ( China) is driving international markets and Brazil can’t be a hostage. Aggregate value to Agribusiness chain is the main focus now to keep the sector growing.
(The opinions expressed in this article are the author’s own and do not reflect the view of any company).
