Syngenta to export soybeans and corn to China

Syngenta will export directly to China a part of the soy and corn it receives from Brazilian producers via barter operations, a mechanism through which it negotiates seeds and pesticides in exchange for grains at harvest. The company already exports coffee and cotton in this same model, dubbed “boutique trading”, through the Nutrade platform.

In the case of soybeans, the first loads should leave Brazil between April and May, according to Dong Guo, global director of the Agricultural Value Chain initiative. André Savino, marketing director for Syngenta Brasil, says that there is no competition with the trading companies. “The operations comprise only grains related to the technologies we supply”, he says.

The company does not disclose the volumes it hopes to achieve, arguing that they will depend on the interest of producers. But a third of about US$ 1 billion of sales in Brazil in 2019 originated from barter.

See the chart below for the history of Brazilian corn and soybean exports to China:

Brazilian Soy (HS 1201) and Maize (HS 1005) Exports to China | Jan 2017 to Nov 2020 | WTMT

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

The priority given to China at this time is due to the potential for demand and the proximity to the Chinese market – Syngenta was acquired by ChemChina in 2017. The company already has a supply agreement with Sinograin, which buys grain for public stocks in the Asian country, and will supply local soy crushers. The idea is also to make more space for Brazilian coffee in the country. Today, the multinational sends the commodity mainly to the United States and Europe. Cotton, on the other hand, is destined for the Asia and Oceania region.

For corn, the potential is uncertain, as Brazil still discusses adjustments to the export phytosanitary protocol with the Chinese. But Dong Guo is optimistic, recalling China’s need for cereal to replenish the local herd that had been wiped out by African swine flu.

Syngenta hopes to form partnerships with trading companies and logistics operators in Brazil to move the grains to be exported. “As an agricultural-input company, our priority is not to invest in agricultural trade facilities,” says Dong Guo.

Source: Estadão

Sharing is caring!