Brazilian Agriculture Minister Blairo Maggi fears that his country will suffer in the long term from the consequences of the trade dispute between the US and China.
Analysts and traders have believed so far that Brazilian producers would be laughing third parties because high Chinese import duties on US soybeans would drive China, the world's largest buyer of agricultural products, into the arms of Brazilian suppliers.
The first consequence, however, was that soybean prices in the South American country had risen so much that the fattening of pigs and poultry became too expensive for the world market. Maggi already sees the competitiveness of these products so endangered that you could lose market share.
In the medium term, this could become a serious problem for Brazil for almost everything exported; be it poultry meat or pork. Namely everything that is fed with soybeans.
In addition, the Brazilian currency was devalued, so that in addition to soybeans and imports were more expensive.
If soybean prices remain high in Brazil, the US would be at an advantage with its meat exports.Brazil is the world's largest poultry exporter, after the US. If China now undertakes to buy more US products, it will be at the expense of Brazil.
Maggi believes that a free trade agreement between Mercosur and the European Union will be achieved by the end of the year.
Text: HANSA Derivatives Trading GmbH /
