Leandro Gilio, from Insper Agro Global, says that eventual trade agreement between countries can make Brazil lose market in Asia
An eventual trade agreement for the United States to export more soy to China is worrying for Brazilian soybean, according to researcher and teacher at ,. This is because the request of local producers made to President Donald Trump (Republican Party) for the US government to close an export agreement can cause Brazil to lose space in the Chinese market.
“We see that the United States has played for negotiation with China and other Asian countries that are relevant markets for Brazil, such as soy. It would be worrying if there was any kind of agreement where, for example, China or other countries agreed to make more purchases in the United States, redirecting the market.”said Gilio in an interview with Poder360.
Insper Agro Global teacher said the reciprocal tariffs imposed by the US country make a possible business less “reliable” for the Chinese. “It has not been very reliable to do business with the United States imposing taxes and problems in commercial terms. For China it is not interesting. On the other hand, it is not interesting for China to maintain a great dependence on Brazilian soy.”he declared.
Data from (soybean and corn producers association) show that China bought 73% of all soy that Brazil exported by 2024, which is equivalent to 74.4 million tons. According to Leandro Gilio, although Brazilian products lead the ranking Export, they still have limited diversity and market reach.
Watch the full interview (37min13s):
Here are other highlights:
- interlocution with the USA – “Of course we now have no dialogue channel so open, but it hasn’t worked very well this dialogue channel from the beginning.”;
- unsustainable tariff – “Tariff is not good for anyone, either for the United States, or to Brazil. The elevation of market protectionism is a slightly lost relationship to both markets. The US consumer will end up absorbing a price rise at the time that is delicate for the US, which already experiences a period of a little higher inflation.”;
- retaliation – “It is not recommended to offer some retaliation to the United States. It would affect our internal economy. It would have a lot of effect on imports in Brazil. If we impose a barrier on answers, we end up feeling because eventually the products we care about the US are more expensive, how it will happen to them now. ”;
- neutrality – “The position of neutrality worked for a long time, given the context that we had much more than a tendency to globalization and multilateralism […] International multilateral institutions, such as the WTO [Organização Mundial do Comércio]which regulated trade, the UN [Organização das Nações Unidas]and all these institutions are weakened today. This position, sometimes, of neutrality, that Brazil has a tradition of adopting, ends up being a little complicated to support at this time. ”
Understand
(American Soybean Association), an entity that represents US soybean producers, sent a letter to Trump in which the republican intercede with the Xi Jinping government (Communist Party of China) to make a trade agreement that includes purchasing commitments from the American grain.
The sector faces financial pressure on the drop in prices and increased production costs, while China – the US soybean buyer – has avoided closing early contracts for the next crop. US farmers say that without a quick solution to commercial impasse, losses can become billionaire and deepen the crisis in the countryside.
“Soy producers are under extreme financial stress. Prices continue to fall and at the same time, our farmers are paying much more for inputs and equipment.”they say in a note.
