Despite End of U.S.-China Trade War, Brazil Will Maintain Strong Soy and Beef Market in China

Country will suffer the effects of the end of trade war between the two giants, when it occurs, but without much intensity

São Paulo

US agricultural producers are excited by China's pledge last week to cut tariff rates on soy and pork. This news of a return to normal trade relations between the United States and China worries Brazilian producers, due to the consequences on Brazilian exports.

The country will suffer the effects of the end of the trade war between the two giants, when it occurs, but without much intensity. The Chinese did not accept Donald Trump's leonine demands. These include purchasing US$ 50 billion in US agribusiness products.

Country will suffer the effects of the end of trade war between the two giants, when it occurs, but without much intensity (Foto: Pedro Ladeira/Folhapress, PODER) - Folhapress

This imposition of the president of the United States, if accepted by the Chinese, would significantly increase the volume imported by the Chinese, with consequences on the prices paid by them.

In the case of soybeans, initial demand for the US commodity would increase, but the available volume and prices of Brazilian oilseed will continue to attract the Chinese.

In the case of meat, the USA and Brazil are strong competitors, but the demand from China is so high that there is room for both. Data from Secex (Secretariat of Foreign Trade) this Monday (9) indicate that, besides volumes, Brazilians gain in price.

The average daily volume of pork exported by Brazil grew 20% this month, compared to November. Chicken prices rose 16%, but beef prices, after the recent acceleration, fell 10%.

The Brazilian exporter receives, in dollars, 30% more for beef this month, compared to December 2018. Pork rose 18%, but chicken fell 1%. 

Translated by Kiratiana Freelon

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