Iowa Public Television


China-Brazil Soybean Flap Widens

posted on June 18, 2004

The Chinese are about to receive an unpleasant note from soybean industry officials in Brazil, Argentina and the United States. The letter will outline growing concern over China's repeated rejection of soybean shipments from Brazil, which is on the verge of taking its case to the World Trade Organization.

China claims there are sanitary standards to consider, but a larger issue may be Chinese trade policy behavior.

China-Brazil Soybean Flap Widens Soybean trade between Brazil and China virtually stopped this week when China banned 15 Brazilian soybean suppliers from trade, bringing the total suppliers affected by the bans to 23.

China is the world's largest soybean importer, purchasing some 20.74 million tons from the U.S., Brazil, and Argentina in 2003. The bans are a result of findings of red fungicide-tainted seeds, known to be harmful to humans. However, the American Soybean Association claims the legumes were meant for oil processing, and the possibility of creating harmful end products are low.

The affects of the bans still are unclear; however, traders from Brazil report that 5 ships currently are sitting in Chinese ports, while 30 shipments en route may be redirected to other destinations. China also refused the entry of two more shipments of 60,000 tons of Brazilian soybeans, bringing the total soy turned away since April 18 to 359,000 tons.

Suppliers are accusing China's General Administration of Quality Supervision, Inspection, and Quarantine of deliberately using vague rules to allow cash-strapped Chinese buyers to get out from under contracts booked when prices were much higher. Brazilian soy exporters allege the ban breaks international trade rules which punish Brazil and not other countries importing to China.

Tags: agriculture Brazil China crops markets news trade