China is intensifying the import of soybean meal from Brazil, rejecting Ukrainian products

China, which used to be the main buyer of Ukrainian corn and sunflower meal, has since the beginning of the war in Ukraine accelerated the signing of permission documents to increase supplies from Brazil.

In 2020/21 MR, the share of Ukrainian corn in the total volume of Chinese imports was 29%, and sunflower meal - 88%. Therefore, a decrease in demand from China will negatively affect domestic exporters, especially meal producers.

At a bilateral meeting of representatives of the China-Brazil High-Level Commission on Cooperation and Understanding (Cosban), the supply of soybean meal to China, which previously bought only soybeans in the range of 70-80 million tons per year, and did not allow the import of soybean processing products, was agreed upon.

Earlier, China and Brazil agreed on the possibility of supplying corn, but the actual export has not yet started, despite the signing of a sanitary protocol between the countries. Brazilian companies still need to certify the products in the fields and obtain a supply permit from the Chinese authorities, but in general, exports can start as early as September-October.

Against the background of the lack of opportunities to export by sea, feed manufacturers have reduced the demand prices for sunflower meal by almost three times to UAH 3,000-4,500/t with delivery to the plant. At the same time, demand prices from European buyers decreased from $320-330/t DAP to $150-170/t DAP Poland.

The resumption of exports from Black Sea ports could boost demand for meal and corn, but this will take at least several months, as Russia reaffirmed its efforts to block grain supplies from Ukraine by shelling the terminal of Ukraine's largest export company, Nibulon, and killing its owner with a missile over the weekend. A. Vadaturskyi.