Brazil, the world’s second-largest soybean producer, said it’s "ready" to boost exports to China after the Asian nation blocked shipments of the oilseed from Argentina, its largest supplier, over a trade dispute.
"We’ll try to occupy the biggest space possible left open by Argentina," Brazilian Agriculture Minister Wagner Rossi said late yesterday in a telephone interview from Brasilia. "Brazil has an opportunity to take advantage of the Chinese embargo on Argentina by raising exports as we’re huge exporters."
Brazil, trailing only the U.S. in soy output, is seeking to boost sales to China after it halted soybean-oil imports from Argentina earlier this month. Brazilian President Luiz Inacio Lula da Silva will discuss the country’s potential for increasing soy oil shipments with Chinese President Hu Jintao during their meeting in Brasilia on April 16, Rossi said.
Brazil exported about 1.59 million tons of soybean oil last year. China, the world’s largest consumer, accounted for about a third of that. In 2008, Brazil exported 2.31 million tons, according to the Brazilian Association of Oilseed Industries. Rossi declined to comment on the size of any potential increase.
Soybean futures for July delivery climbed 1.5 cents, or 0.2 percent, to $9.77 a bushel on the Chicago Board of Trade for its fourth straight gain, the longest rally since March 22.
Argentina is the world’s biggest producer of soybean oil and supplies about 80 percent of Chinese demand. Argentina primarily ships crude soybean oil, which must be refined before human consumption, to the Asian nation.
Stopped Approving Permits
China stopped approving permits to import soybean oil from Argentina, the world’s biggest supplier of the edible oil, four executives familiar with the halt said last week. China acted after the Latin American nation increased antidumping measures against Chinese imports, they said, citing Vice Chairman Bian Zhenhu of the China Chamber of Commerce of Import and Export of Foodstuffs, Native Produce & Animal By-Products.
"We can increase exports no doubt," Rossi said. "Brazil’s industry has great capacity in adapting to rising demand. Our productive capacity accepts challenges."
In the near term, Argentine exporters will have difficulty finding alternative destinations for their oil, Thomas Mielke, executive director of Oil World, an industry journal, said in a report to media in Beijing on April 12.
Source: Business Week
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