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Montevideo, March 22nd 2019 - 23:11 UTC

China wants to buy directly from Brazilian farmers, avoid intermediation

Tuesday, August 16th 2011 - 06:19 UTC
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Mato Grosso is Brazil’s main soybean production area Mato Grosso is Brazil’s main soybean production area

China, the second-largest buyer of soy in the world wants an end to intermediation by US multinational companies working in the sector and plans to invest purchasing directly from farmers in Mato Grosso and another five states in Brazil, according to the Brazilian press.

Chinese investments are expected in factories for crushing of oil-producing beans, docks for ships, infrastructure, logistics, silos and acquisition of agricultural land.

As well as Mato Grosso, the Chinese plan to invest in Bahia, Santa Catarina, Goiás, Rio Grande do Sul and Tocantins in order to increase their presence in the production chain starting in Brazil.

The Mato Grosso area is expected to play a fundamental role in that expansion. Mato Gross is the largest producer of soy in Brazil and may be the target of investments to acquire land and purchase soy directly.

In the state of Goiás China plans to invest 12 billion Real, which will be used to recover rundown areas, buy 6 million tons per year and improve facilities to transport grains and oil seeds.

Another example of China’s intent is underway in the state of Bahia, where 4 billion Real are to be invested in buying soy and setting up industries to process the produce, according to Folha de São Paulo.

Meanwhile, a newspaper from Florianópolis, in the southern state of Santa Catarina, reported that a mission from the Chinese province of Hebei had been to the region and visited experimental soy, maize and cotton production fields in that state.

Tags: Brazil, China, soybean.

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  • GeoffWard2

    My guess is that the (US) multinational agro-industrials set the benchmark price for sales to China.
    If China can cut out this benchmarking it can progressively screw-down the price at which it buys food/feed products from Brasilian farmers.
    This is not in Brasil's best economic interest, in spite of the fact that the 'cartel' maximises profits to the 'US' agro-industry.

    Would be interested to hear other opinions as this is a new perspective, especially here on Mercopress.

    Aug 17th, 2011 - 09:15 am 0
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