Written by Lori Chen, Mei Mei Zhou, Ella Cao, Naveen Thukral, and Anna Manu
BEIJING/SAO PAULO (Reuters) – China, the world's largest soybean buyer, has stopped receiving shipments of Brazilian soybeans from five companies after the shipments did not meet plant health requirements, according to a statement from the Brazilian government confirming what Reuters learned from two sources. Wednesday.
The phytosanitary comment comes as Brazil works to consolidate its share in the world's largest soybean market at the expense of the United States, the second-largest soybean exporter.
It's also an unexpected development in the global agricultural supply chain, as US President Donald Trump's threats to renew tariffs on Chinese imports have heightened geopolitical tensions between the world's two largest economies.
The Brazilian Ministry of Agriculture said that the “non-conformity” notice it received from the General Administration of Customs of China refers to five Brazilian companies, which the ministry did not name.
Since January 8, Brazil has suspended shipments to China from Terra Roxa Comercio de Cereais, Olam Brasil and C.Vale Cooperativa Agroindustrial, one of the sources told Reuters.
On January 14, Chinese customs suspended shipments from Cargill Agricola SA and ADM do Brasil, that source added.
Olam, Cargill and ADM together accounted for about 30% of the more than 73 million metric tons 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 that the impact on the country's exports was minimal.
“The work of corporate units has been suspended, but other units of the same companies can continue exporting,” said Luis Roa, Minister of Trade and International Relations of the Ministry of Agriculture.
Archer Daniels Midland, the parent company of ADM do Brasil, declined to comment. Cargill, the privately held US grain trading giant and parent company of Cargill Agricola SA, also declined to comment.
Juliana Basso de Araujo, owner of Terra Roxa Comercio de Cereais, declined to comment. The parent companies of the other two affected companies did not respond to Reuters' requests for comment.
China's GACC did not respond to a request for comment.
“When we try to process clearance on the customs website for soybeans shipped by these five companies, we are unable to move forward,” said a second source, a soybean crusher dealer in China.
Countries typically require that imported or exported agricultural commodities be inspected for pests and diseases, to protect the domestic food supply.
The detention comes before peak load
Brazilian soybean export shipments remain seasonally light early in the South American harvest. But market analysts say shipments are set to rise over the coming weeks as more of the harvested crop is moved to market, at which point the suspension could be far more disruptive.
Some analysts questioned the timing of the comment, as it was very close to Trump's inauguration.
Jim Gerlach, president of US brokerage A/C, said China may want to slow shipments from Brazil to wait for profit margins to improve after making large purchases or to give Beijing room to strike a trade deal with Washington that could include buying US soybeans. commerce.
“This could be something that gives Xi (Jinping) an opportunity to buy American beans to keep and get some goodwill,” Gerlach said.
The Brazilian Ministry of Agriculture said that the Anti-Corruption Authority discovered the presence of pesticides and pests during routine inspection of shipments.
“The General Authority of Civil Aviation has informed the Brazilian side of the temporary suspension of corporate units, which demonstrates confidence in the Brazilian inspection system and the strength of the work carried out by the Brazilian government and exporters,” the ministry said.
Brazil's total soybean exports to China “will not be affected,” the ministry said, adding that it would provide the necessary information to China to lift the temporary suspension.
It was not clear how many shipments and volumes were affected by the nonconformities, as the Brazilian government did not provide additional details. It was also unclear how long the suspension would last, although traders expected it to be short-lived.
China, which buys more than 60% of the soybeans shipped around the world, now imports more than 70% of its oilseed imports from Brazil, eroding US market share.
An official at one of the affected companies told Reuters, “We take the matter seriously.” He declined to reveal his name due to the sensitivities of the topic.
China imported a record 105 million metric tons of soybeans in 2024.
