Brazil says soybean shipments to China from five factories have been halted due to contamination Reuters

By Laurie Chen, Mei Mei Chu, Ella Cao, Naveen Thukral and Ana Mano

BEIJING/SAO PAULO (Reuters) – China, the world’s biggest soybean buyer, has stopped accepting shipments of Brazilian soybeans from five factories after the shipments did not meet plant health requirements, according to a statement from the Brazilian government confirms what Reuters has learned from two sources. on Wednesday.

The phytosanitary-related suspension comes as Brazil strengthens its share of the world’s largest soybean market at the expense of America’s No. 2 exporter, the United States.

It’s also an unexpected shift in global agricultural supply, as US President Donald J. Trump’s threats of renewed tariffs against Chinese imports have heightened tensions between the two world’s top exporters. world economy.

Brazil’s agriculture ministry said the notice of “non-compliance” it received from China’s General Administration of Customs (GACC) refers to five Brazilian companies, which the ministry did not name.

One of the sources told Reuters that as of January 8, Brazil has suspended shipments to China from Terra Roxa Comercio de Cereais, Olam Brasil and C.Vale Cooperativa Agroindustrial.

On January 14, Chinese customs stopped shipments from Cargill Agricola SA and ADM do Brasil, the source added.

Olam, Cargill and ADM together accounted for 30% of the more than 73 million tonnes of soybeans shipped from Brazil to China in 2024, according to data from shipping company Cargonave Group.

However, Brazil’s agriculture ministry said only a small amount of soybeans were affected and the impact on the country’s exports was minimal.

“Parts of the companies were suspended, but other parts of the same companies can continue to export,” said Luis Rua, secretary of the Ministry of Agriculture and International Relations.

Archer-Daniels-Midland Co, the parent company of ADM do Brasil, declined to comment. Cargill Inc, the privately held US grain trading giant and parent of Cargill Agricola SA, also declined to comment.

Juliana Basso de Araújo, owner of Terra Roxa Comercio de Cereais, declined to comment. The parent companies of the other two companies involved did not respond to Reuters requests for comment.

China’s GACC did not respond to a request for comment.

“When we are trying to get approval at the customs website for the soybeans sent by these five companies, we are unable to proceed,” said the second source, a China-based soybean machinery trader.

Countries often require imported or exported agricultural products to be inspected to ensure they are free of pests and diseases, to protect the local food supply.

MOUNTING COMES BEFORE SUMMIT FILLING

Brazil’s soybean exports remain light during the South American harvest. But loads will increase in the coming weeks as more harvested crops are brought to market, at which point the suspension could become more disruptive, market analysts said.

Some critics questioned the timing of the suspension, which is so close to Trump’s inauguration.

China may want to delay shipments from Brazil to wait for parties to improve after the heavy buying or to give Beijing room to strike a trade deal with Washington that could include buying U.S. soybeans, said Jim Gerlach, president of the US A/C business. Business.

“It would be one thing to give Xi (Jinping) an opportunity to buy US beans to keep them and gain goodwill,” Gerlach said.

Brazil’s agriculture ministry said the GACC detected the presence of pesticides and insecticides during a routine inspection of goods.

“The temporary suspension of the shares of the companies was announced in advance by the GACC on the Brazilian side, showing confidence in the Brazilian inspection system and the seriousness of the work done by the Brazilian government and exporters in country,” said the department.

The ministry said that Brazil’s total soybean exports to China “will not be affected”, and added that it would provide the necessary information for China to lift the temporary suspension.

It was not clear how many goods and volumes were affected by the non-conformities, as the Brazilian government did not provide further details. It was also unclear how long the suspension would last, although traders expected it to be short.

China, which buys more than 60% of the world’s soybean exports, now takes more than 70% of its oilseed exports from Brazil, feeding the US market.

“We are taking it seriously,” an official at one of the affected companies told Reuters. He declined to be named because of the seriousness of the matter.

China has set a record 105 million tons of soybeans by 2024.