MercoPress, en Español

Montevideo, March 29th 2024 - 08:55 UTC

 

 

China, Brazil and Argentina seeking soy axis

Monday, April 17th 2006 - 21:00 UTC
Full article

China, Brazil and Argentina are mulling the creation of a multinational market for soybeans as an alternative to the Chicago Board of Trade.

The idea is being explored at a five-day seminar that got under way here Monday, organized by the Brazilian Mercantile and Futures Exchange and markets based in Rosario, Argentina, and Dalian, China.

"We have signed a memorandum of understanding with the Chinese exchange of Dalian that will serve as a point of reference in our quest for a joint futures market, so we can operate in their markets and they in ours," Rosario futures exchange chief Jorge Weskamp told to the press.

After its sessions in Beijing, the seminar will travel to the cities of Dalian, Shenzhen and Shanghai.

Under the current arrangement, world soy prices are set by the Chicago exchange, which, Weskamp said, does not always reflect the necessities of "our market." He did not venture to predict how long it will take for Argentine, Brazilian and Chinese exchanges to establish a parallel soy market, noting that many interests are involved.

Weskamp also pointed to questions of market access that remain to be resolved with Beijing. "China is opening up," he said, "but it's not totally open." China currently consumes around 15 million tons of soy annually, a level of demand that is expected to double in the next few years.

Brazil - the world's leading exporter of the product - and Argentina together control more than 60 percent of the market here and are anxious to maintain their dominance.

"Brazil is the country that is most able to expand (production) because it still has room to extend cultivation. Argentina and the United States are more filled up, there is no land, though the technological factor could help improve production," Weskamp said.

During last month's visit to Beijing by Brazilian Vice President Jose Alencar, Chinese officials indicated an interest in making direct purchases of soy from South America.

Categories: Mercosur.

Top Comments

Disclaimer & comment rules

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!