BRASILIA, Brazil (Reuters) — Chinese and Brazilian companies could form soy-processing joint ventures as a way for Latin America’s largest economy to export more processed soymeal to its top buyer of raw soybeans, a senior Chinese diplomat in Brazil said.
Chinese firms overwhelmingly process soybeans in domestic plants rather than buying soymeal directly from Brazil, but companies will choose whatever gives them the best profits, said Qu Yuhui, minister-counselor in charge of political affairs at the Chinese embassy in Brasilia.
“If a Chinese and Brazilian company together found a joint venture in Brazil to process soybeans, that is a good choice for both side’s profits,” he said, adding that such a partnership could ease the burden of Brazilian logistics costs.
Still, Qu said China is not discussing giving Brazil a soymeal quota with a lower import tax.
Chinese investment in Brazil jumped in 2017 to a seven-year high, stoking debate over bilateral relations ahead of the Brazilian presidential election in October. Chinese purchases of land and mining operations have drawn criticism from right-wing candidate Jabir Bolsonaro, who is leading the race.
“China isn’t buying in Brazil, it is buying Brazil. This is a big problem that we should be worried about,” Bolsonaro said recently.
Qu said it was hard to understand the root of Bolsonaro’s concern. Chinese buyers account for just three percent of foreign land purchases in Brazil, he said.