China concerned about supply chain disruptions due to increase of COVID-19 cases in Brazil

According to Reuters, China’s Ministry of Commerce has asked food-related companies to increase grain and oilseed inventories due to the possibility of a second wave of contamination by the new coronavirus and worsening infection rates in other countries.

“There is a possibility of a supply chain collapse due to coronavirus infections. For example, a port of origin or destination may close, ”a senior trader at one of China’s largest food processors told Reuters.  According to him, Chinese authorities are concerned by the spread of the pandemic in Latin America, but mainly in Brazil, which is its main supplier of soy and an important supplier of meat.

It is worth noting that in recent weeks, the Chinese state-owned agricultural conglomerate COFCO, and grain distributor Sinograin, increased purchases of soybeans and corn from the USA. The following chart shows Brazilian soybean exports to China and the rest of the world on a month-by-month basis:

Chart source: DataLiner (To request a DataLiner demo click here)

Source of report: Reuters

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