China's Agricultral Investments in Brazil

UPDATED: August 18

China in Brazil

China is Brazil’s main trading partner.

OVERVIEW:

The new deals being negotiated between Brazil and China are by far the most important fundamental X factor in global agriculture going forward. Make sure you follow and understand this.

Brazil's ambassador in Beijing, Marcos Caramuru de Paiva:

He believes that the entry of Chinese financial groups in Brazil bring something "totally new" to Sino-Brazilian economic relations, highlighting the investment of Fosun Group and Haitong bank.

"I am completely convinced that the photograph that you take today of economic and trade relations between China and Brazil will not be the same in five years.

Mato Grosso

2017 will go down in Mato Grosso history as the year that China entered Brazil ag for the long run. Earlier in the year, China purchased an equity stake in the, locally run grain trader, Fiagril. This gave the Chinese the ability to directly source soybeans, store them, and move them to ports.

Recently, Cofco has purchased two soy warehouses in northern, MT and plans to build a new one in Marcelandia, MT, which is also in northern MT. This is the most significant strategic move made by an international grain company in many years.

China now feels comfortable with the ability for soybeans and corn to move north either via BR 163, barge, or rail in the future. They feel comfortable that the new government will be friendly towards ag.

I believe that the purchases of these soy warehouses are of extreme importance when analyzing the land market for the future. When the limit of foreign ownership of land is lifted, I think we know where China will be buying land. The new hot spots have been marked.