BUSINESS Brazil's sugarcane shifted to soy on China demand


Brazil's sugarcane shifted to soy on China demand

Reuters-Global Times

21:37, August 14, 2018

Shifting trade flows are redefining the Brazilian landscape, spurring more farmers to align their crops with Chinese appetites. 

The nation's soy plantings have expanded by 2 million hectares in the last two years - an area the size of New Jersey - while land used for cane has shrank by nearly 400,000 hectares, according to government data.

China's growing demand for meat has supercharged soy imports for animal feed. 

A new 25 percent Chinese tariff on US soybeans - a retaliation to US levies by President Donald Trump - is expected to boost Brazil's soy exports to an all-time record this year.

Brazilian soybean exports to China rose to nearly 36 million tons in the first half of 2018, up 6 percent from a year ago. In July, they surged 46 percent from the same month a year earlier to 10.2 million tons.

All that soy is eating into Brazil's sugarcane belt. 

"We lost 3,000 hectares of cane area to grains in the last two years," said Roberto de Rezende Barbosa, chief executive of Nova América, one of the largest cane growers in Brazil, managing 110,000 hectares.

Rezende said he had seen farmers migrating from sugarcane into grains in nearly every state where both crops are viable.

"This Chinese demand has attracted all the farmers," said Marcos Cesar Brunozzi, who switched part of his land from sugar to grains in the Brazilian state of Minas Gerais. "I hope the whole situation doesn't change suddenly, because we are betting big."

Cover image: VCG

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