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Brazilian Agribusiness Assesses Gains from Trade War between U.S. and China

04/06/2018 - 10h57

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FROM SÃO PAULO

Brazilian economy sectors whose products were affected by higher taxes imposed by China on American goods are still calculating their gains.

The internationalization of agricultural companies, operating in virtually all countries and which will redistribute their goods, should reduce such advantage.

Soybean exporters are expected to prioritize the shipping of goods from South America to China, and to export soybean from the US to Europe.

A second point to be considered is the large export capacity of the US, which Brazil will not be able to replace.

This trade fight will benefit cotton producers, but Brazil will not replace the US, the largest exporters in the world. The Chinese surcharge on cotton improves Brazil's situation for now and may contribute to the country's goal of increasing its production within five years, according to the producers' association.

Regarding orange juice, the impact should be minimum, seeing Brazil is the largest exporter of the product in the world and such US exports are limited.

In the ethanol sector, local taxation may increase competitiveness of the Brazilian product despite the surcharge on American goods, according to the sugar cane industry association.

The meat sector should benefit mainly from pork exports, in view of the fact that the Chinese market already had restrictions for poultry and cattle.

Translated by ANA BEATRIZ DEMARIA

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