Brazil and US fight corn war over China

The arrival of a new Brazilian president creates risks for America: it may lose its title as the leading exporter of corn to China.

According to the Australian broker Grain Brokers Australia, geopolitical changes may also cause trade shifts in relations between countries.

For example, while Bolsonaro was the President of Brazil, China did not allow this country to supply its corn to its territory.

Perhaps it was «revenge» for the fact that Bolsonaro refused to involve Chinese telecommunications companies in the creation of 5G networks in Brazil.

But now that Lula da Silva has become President of Brazil, things may change, and the Chinese gates will open to Brazilian agricultural producers.

Actually, everything is already moving towards this: the General Administration of Customs of China has added a whole hundred Brazilian exporters and export terminals to the list of those with which companies from the Middle Kingdom have the right to cooperate.

Now it remains only to wait until everyone finally agrees in order to start test deliveries of small batches of corn to the territory of the PRC.

It is planned that they can start in December. It is quite possible that the parties are in a hurry to start test deliveries, so that from the new year nothing will prevent them from moving on to the “real” ones.

China is in a hurry to diversify


It is possible that China «forgave» Brazil not only in connection with the change of its leader, but also for other reasons.

In connection with the Russian-Ukrainian conflict, the supply of many types of agricultural products from the Black Sea region, including corn, was called into question.

And if so, then I had to think about where to find a replacement for the falling volumes.

At 70%, China previously purchased corn from the United States, but, apparently, it was decided not to increase dependence on one supplier.

In addition, relations between China and the United States are far from the best, so geopolitics could also play a role here.

In addition to Brazil, a number of other countries can benefit from the diversification of Chinese corn supplies, such as Egypt, Iran, Japan, Spain and Vietnam.

China increases imports


Among other things, China seems to be increasing demand for corn.

For example, this September, he bought 1.8 million tons of it, which is 56% more than in the same period last year. If this trend continues, it is possible that other suppliers will “connect” as well.

At the same time, even if China completely abandons corn from the United States, the world market will, for the most part, be shuffling: American grain will go to countries that previously bought corn from Brazil, and now they will not get it, since everything will be sold To China.