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Sophia Klein
Brazil’s Soybean Shipments to China Reach Record Levels Amid Trade Uncertainty
Brazil is set to ship record soy volumes in Q1, mainly to China, amidst U.S. trade tensions. Analysts report that 22.8 million tons, including 17.7 million to China, have already been shipped, with predictions of break records due to increased pre-purchases. The full impact of trade tensions is yet to manifest, but demand remains strong.
In the first quarter, Brazilian soybean shipments are set to reach record levels, primarily due to increased demand from China, the leading global importer. Analysts note that current shipping data does not yet indicate the ramifications of the ongoing trade conflict between China and the United States but anticipate that further escalation could shift more Chinese demand toward Brazilian soy, similar to trends observed in 2018.
As of March 25, Brazil had loaded 22.8 million tons of soybeans, with 17.7 million tons destined for China. Eduardo Vanin, an analyst at Agrinvest, remarked that these figures are unprecedented, despite logistical challenges and a sluggish start to Brazil’s harvesting season.
Additionally, Brazil’s soybean shipments to China are based on pre-purchased contracts of approximately 33 million tons secured by December 2024, with this volume exceeding last year’s figures by 7 million tons. Brazilian farmers typically plant soybeans in September, harvesting by early January. Ports begin to experience significant activity starting in February.
Andre Pessoa from Agroconsult expressed that the trade war’s impact on shipments is minimal at this time, although prior Chinese purchases indicate a strategic response to potential U.S. political outcomes. Brazil is projected to produce over 170 million tons of soybeans this year, marking a historical high.
Analyst Luiz Fernando Roque pointed out that while the trade conflict has a limited immediate effect, he expects a record in shipments to China for the first quarter, estimating around 18 million tons, a 2 million ton increase from the previous year. He also noted that the repercussions of the trade war often become more pronounced in the latter half of the year when U.S. soybean exports to China peak. In fact, recent data indicates that from January to February, 79% of Brazilian soybean exports were exported to China, an increase from 75% during the same period last year.
Brazilian soybean exporters anticipate a record shipping volume in response to strong Chinese demand, partly influenced by the ongoing U.S.-China trade tensions. With advanced purchases already exceeding previous year’s totals, Brazilian farmers are positioned to meet growing Chinese import needs effectively. Although the direct impacts of the trade war are yet to be fully felt, demand trends suggest a bright outlook for Brazil’s soybean industry.
Original Source: money.usnews.com
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