On Tuesday a Bloomsberg report stated that China had agreed to lift its ban on soybeans from Brazil, ending a heated row that had embroilded the World Trade Organization (WTO). China introduced the ban after customs officials stated that consignments of Brazilian soybean were contaminated with a banned fungicide, which Brazilian authorities argued was still well under international levels of acceptability.
Brazilian authorities had said that the 23 firms involved in the ban had been given authorization to start unloading their soybean consignments to China, an announcement that was confirmed by Brazilian state government.
Brazil has been keen to resume its all-important soybean trade with China, currently valued at $1.6 billion annually, as it is one of the country's most important sources of export revenue. It also comes at a time when Brazilian soybeans crops have been hard hit by bad weather and infestations.
Earlier in the week Foreign Minister Celso Amorium had said that if the case were to persist it would be taken to the WTO, a step that Brazilian authorities later undertook. Now that China has again refused to resume soybean trade with Brazil it seems inevitable that the organisation will be brought back into try and sort the spat out, although the WTO has refused to make any official comment on the situation.
The latest developments come just one month after Brazilian and Chinese officials and business representatives met in Shanghai to discuss ways in which Brazilian soy bean growers might be able to meet China's rising demand for soy products.
Following the meetings, the Brazilian agriculture minister, Roberto Rodrigues, said that the country currently had 62 million hectares of land planted for agricultural crops and that a further 90 million hectares is soon to be occupied for the same purpose. The growth in arable land use is being largely attributed to the planting of soy crops, which the government says could solve China's short falls in domestic demand.
Howevever, China's other leading soybean supplier, Argentina, will not be so keen to have the Brazilian ban on soy bean imports to China lifted. Last year its exports of soy bean to the China market accounted for 15 per cent of its total exports, valued at nearly €300 million.
Both Brazilian and Argentinian soybean suppliers have been going head-to-head in their attempts to carve up a slice of the lucrative China market, but with Brazilian suppliers currently having to stand on the side lines, opportunities will inevitably be opening up for Argentinian suppliers.