Brazilian soybean farmers in Mato Grosso are looking to increase their Asian market share, having agreed a partnership with the Panama Canal Authorities last week.
The agreement, signed last Wednesday and announced later in the week, will increase information sharing such as market and commercial activities, between Aprosoja, the Association of Soybean and Corn Producers of Mato Grosso, and the Panama Canal Authorities.
The partnership will enable soybeans produced in Mato Grosso, which produces around 30% of all Brazilian beans, to reach Asian markets more quickly than via the traditional route, which sees cargoes head east from Santos past the Cape of Good Hope.
Increasing the Brazil’s soybean volume through the recently-expanded Panama Canal will cut journey time to Asian ports by “two to four days – and would represent a significant reduction, both financially and logistically,” executive director of the logistical arm of Aprosoja Edeon Vaz Ferreira said.
The agreement comes amid a growing trade dispute between China and the US – the world’s largest soybean buyer and its biggest supplier – and paves the way for direct competition between exporters in northern Brazil and the Pacific Northwest.
Brazil exported 54.39 million mt of soybeans worth $20.52 billion to China between February 2017-January 2018, according to data from Brazil’s customs authorities.
Recent investment by ADM, Glencore and Louis Dreyfus in the northern ports such as Barcarena and Sao Luis has already boosted its exports which doubled in 2017/18 and accounted for 12% of exports destined for China.
“The Panama Canal would be an option for the [Mato Grosso] product to reach Asia, with China being the main highlight,” Jorge Luis Quijano, the administrator of Aprosoja, said, highlighting that the recent 2016 expansion of the canal was the main catalyst behind the agreement.
Source: Agri Census