China pushes Brazilian soybean trade

“It takes a thousand tons of water to produce one ton of
grain,” said Lester Brown, president of Earth Policy Institute, an environmental
research and advocacy group. In northern China, where soybeans traditionally
have been grown, water tables are dropping at a rate of one to three meters (3
to 10 feet) a year. Diminishing water supplies are hampering the ability of
China to feed itself, and the increasing US use of farmland to produce biofuels,
like ethanol, is pushing China to seek more of its agricultural staples from
South America, where land is still inexpensive and plentiful.

No rewards
In some parts of Brazil, the challenge of
supplying China is already showing signs of strain. The soybean boom in the past
two years has not brought rewards for many farmers in which produces more than a
third of the country’s beans. “Just because we’re producing a lot of beans here
doesn’t mean we’re making money,” said Rogério Salles, a soybean farmer in Mato
Grosso state (western Brazil).

A higher-valued Brazilian currency
and a bottlenecked transport system are working against many Mato Grosso farmers
like Salles. Most soybeans are trucked south more than 1,600 km along two-lane
highways full of potholes. At the export ports, some ships wait at sea for up to
a month before finding docking space to load the beans.

Different buyers
As for China, its dream is to connect
directly with Brazilian farmers, bypassing the multinational grain merchants.
Brazilian farmers say they would welcome Chinese money, but worry about having
China as its primary soybean buyer, recalling an incident in 2004, when China
rejected several shipments of Brazilian soybeans, saying they were
contaminated.

To try to counter the Chinese influence, Brazilian
producers are working with US growers to diversify their buyers. American
soybean producers organized a joint trade mission with Mato Grosso farmers last
December to India, another huge potential market.

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