SAO PAULO (Reuters) — China has agreed to allow imports of Brazilian corn, providing a key market for surging production that has left a surplus of the grain in the Latin American farming giant local media said on Wednesday.
An official agreement will be signed with Brazilian officials in coming hours, local papers Valor Economico and Folha de S. Paulo said, reporting from China. Agriculture ministry representatives in Brasilia said they could not confirm the reports.
China mostly imports corn from the United States but allowed its first major shipment from Argentina in August. Brazil had been working to address China’s phytosanitary concerns and prove that there is no risk of bugs or fungi to its local crop.
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Although China is the world’s No. 2 corn producer after the United States and should produce 210 million tonnes of the grain this season, it is expected to expand its imports of the grain to feed its growing middle class.
In the 2012-13 season, China imported three million tonnes of corn, an amount that should rise to seven million in the 2013-14 season, according to the U.S. Agriculture Department.
At the same time, Brazil’s corn production has increased by 60 percent in the past 10 years, culminating in a record 80-million-tonne crop in the 2012-13 season that left the country with far more corn than it can use domestically.
The agriculture ministry eventually expects China to take up to 10 million tonnes of Brazil’s corn per year. However Benedito Rosa, the director of the department of commercial affairs, told Reuters in September that imports for the 2013-14 season would likely be small.
China is so tied to the United States market it will take some time for Brazil to get its foot in the door, he said.
Brazil’s corn output is expected to decline slightly in the 2013-14 season as farmers favor soybeans. China approved the import of a new brand of genetically modified soybeans, Monsanto CO’s Intacta RR2, in June.
