Because of the ongoing trade discussions between China and the US, China National Cereals, Oils and Foodstuffs Corporation (COFCO) increased their import of Brazilian soybeans to 20%, from its 2017 import.
China had imported 88 million tons of American soybeans last year.
Accounting for "bumps along the road" in reference to the US-China trade relationship, COFCO company chairman Johnny Chi, referring to the relationship of China and Brazil, said, "from COFCO's point of view, the long-term relationship between our countries and our businesses looks very solid."
With China purchasing soybeans from Brazil, it has pushed up prices with the premium for October at Paranagua port reaching 11% Friday to 99c a bushel.
Chi said the Chinese commodities trader agrees with the sustainable growth of Brazilian agriculture.
He added that the company sees " great potential for growth in Brazilian agriculture." While paying tribute to Brazil's natural resources and beauty he commented that "These two are not contradictory."
COFCO is working on a plan to make long-term financing of soy production in Brazil's open land of "over 25 million hectares, suitable for farming."
COFCO is also expecting to buy 5% more of soybeans every year for the coming five years.
Data shows this South American nation is to be the largest soybean producer by 2020.
Chi is also expecting the business relationship between COFCO and Brazilian farmers to get stronger.
"We expect to have a business environment that is more predictable and safe," Chi said in his talk. "It is a good moment to think how we can deepen this partnership," he added.
Chi also stated that since COFCO bought the traders Nidera and Noble Agr in 2014, it is continuously searching for ways to expand.
COFCO will also increase investments in Brazil following further improvement of its business environment after approval of economic reforms.
These other investments will include transportation systems and warehouses, Chi said in Brazil's 2019 Agribusiness Congress.
Also, the company will boost its renewable energy operations in Brazil where it has four ethanol plants.
With China acting as an impetus in attracting foreign investors, Brazil is going to enact reforms on taxes and pensions and improve fiscal balance.
