Brazil is close to an agreement that would allow the world’s second-largest corn exporter to boost sales of the grain to China.
Talks between the governments of Brazil and China are in advanced stages, with many of the technical barriers and issues relating to preventing the spread of pests or crop diseases in the process of being resolved, according to Bloomberg.
Traders also recently met members of Brazilian grain exporter group Anec to discuss the issue. Officials did not comment.
Brazil and China already have a protocol establishing guidelines for corn trade, but some specific issues in the current rules have limited sales.
From January to November this year, Brazil shipped 23,010 metric tons to China, a tiny volume relative to its total exports of 29.8 million, according to figures from the Economy Ministry.
China, once a negligible corn importer, needs so much of the grain that it has this year exceeded for the first time a 7.2 million-ton quota set by the World Trade Organization. The nation’s imports could reach 22 million tons this season, according to the U.S. Department of Agriculture’s Foreign Agriculture Service, while Goldman Sachs Group estimates purchases of 33 million.
The deal comes as China, the world’s top commodities buyer, needs to boost grain purchases to feed a hog herd that’s recovering faster than expected from a deadly pig disease. It could also pose a threat to the U.S., which has sold the most corn on record to the Asian nation in the current season.
Brazil´s exports to China will reach USD 100 billion a year within a decade, Economy Minister Paulo Guedes recently said.