China absorbs massive Brazilian soy shipments in first quarter
Current soy volumes being shipped do not yet reflect the effects of the new trade war, the analysts said. They believe an escalation will direct more Chinese demand to Brazil over time, as was the case in 2018.
Brazilian traders had loaded 22.8 million tons of soybeans onto vessels through March 25, 17.7 million of that going to China, said Eduardo Vanin, an analyst with Agrinvest. He noted both figures "are records" in spite of some logistical bottlenecks and a slow start to Brazil's harvest.
Brazil's first-quarter soy shipments to China reflect advanced purchases for some 33 million tons made by December 2024, when the new crop was not ready and Chinese crushing markets were healthy, Vanin said. This is 7 million tons more than in the previous season at the same time.
Brazilian farmers normally sow soybeans from September and harvest the crop in the first weeks of the new year, depending on the region.
Ports start getting busy from February on.
Andre Pessoa, a partner at agribusiness consultancy Agroconsult, said the trade war has no influence on shipments now, though China's advance buying movement last year suggests Chinese importers were "preparing for a possible Trump victory."
Brazil will reap more than 170 million tons of soy this year, the highest ever.
"I think the influence of the trade war is very small for now," said Luiz Fernando Roque, an analyst at Hedgepoint Global, adding Chinese demand for Brazil's soy has been on the rise for years.
Even so, Roque expects Brazil's soy shipments to China to break last year's record for the first quarter, totaling around 18 million tons in the period, some 2 million tons higher than in the previous year. He added the effects of the trade war tend to be more intense in the second half of the year, when the U.S. generally sells more soy to China.
In January and February, China received 79% of Brazilian soybean exports, compared to 75% in the same period last year, grain exporters' lobby Anec said.
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