BEIJING/SAO PAULO (Reuters) -China, the world’s biggest soybean buyer, has stopped receiving Brazilian soybean shipments from five firms after cargoes did not meet plant health requirements, according to a statement from the Brazilian government confirming what Reuters had learned from two sources on Wednesday.
The phytosanitary-related suspension comes as Brazil has been bolstering its share of the world’s biggest soybean market at the expense of the No. 2 exporter, the United States.
It’s also an unexpected twist in the global agricultural supply chain, as U.S. President Donald J. Trump’s threats of renewed tariffs against Chinese imports have increased geopolitical tensions between the world’s top two economies.
The Brazilian agriculture ministry said the “non-conformity” notice it received from China’s General Administration of Customs (GACC) refers to five Brazilian companies, which the ministry did not name.
One of the sources told Reuters that since Jan. 8 Brazil has suspended shipments to China from Terra Roxa Comercio de Cereais, Olam Brasil, and C.Vale Cooperativa Agroindustrial.
On Jan. 14, Chinese customs suspended shipments from Cargill Agricola SA and ADM do Brasil, that source added.
Olam, Cargill, and ADM together accounted for about 30% of the more than 73 million metric tons of soybeans shipped from Brazil to China in 2024, according to data from shipping company Cargonave Group.
However, Brazil’s agriculture ministry said only a small volume of soybeans were affected and the impact on the country’s exports was minimal.
“The companies’ units were suspended, but other units of the same companies can continue exporting,” said Luis Rua, the Ministry of Agriculture’s secretary of commerce and international relations.
Archer-Daniels-Midland Co, the parent company of ADM do Brasil, declined to comment. Cargill Inc., the privately-held U.S. grain trading giant and parent of Cargill Agricola SA, also declined to comment.
Juliana Basso de Araújo, owner of Terra Roxa Comercio de Cereals, declined to comment. The parent firms of the other two affected companies did not respond to Reuters’ requests for comment.
China’s GACC did not respond to a request for comment.
“When we try to process clearance on customs’ website for soybeans shipped by these five companies, we are not able to proceed,” said a second source, a trader at a China-based soybean crusher.
Countries typically require imported or exported agricultural goods to be inspected to ensure they are free of pests and diseases, to protect local food supplies.
HOLD-UP COMES AHEAD OF PEAK LOADINGS
Brazilian soybean export shipments remain seasonally light early in the South American harvest. But loadings are due to surge over the coming weeks as more of the harvested crop is moved to market, at which point suspensions could be far more disruptive, market analysts said.
Some analysts questioned the timing of the suspensions, so close to Trump’s inauguration.
China may want to slow shipments from Brazil to wait for crush margins to improve after making big purchases or to give Beijing room to make a trade deal with Washington that could include purchases of U.S. soy, said Jim Gerlach, president of U.S. brokerage A/C Trading.
“It could be something to give Xi (Jinping) an opportunity to buy U.S. beans to put in reserve and get some goodwill,” Gerlach said.
The Brazilian agriculture ministry said the GACC detected the presence of pesticides and pests on a routine inspection of cargo.
“The temporary suspension of the companies’ units was communicated in advance by GACC to the Brazilian side, demonstrating confidence in the Brazilian inspection system and the robustness of the work carried out by the Brazilian government and exporters,” the ministry said.
The ministry said Brazil’s overall soy exports to China “will not be affected”, adding it will provide the needed information for China to lift the temporary suspensions.
It was unclear how many cargoes and volumes were affected by the non-conformities, as the Brazilian government did not provide additional details. It also was not clear how long the suspension would last, although traders expected it to be short-term.
China, which buys more than 60% of soybeans shipped across the world, now takes more than 70% of its imports of the oilseed from Brazil, eating into U.S. market share.
“We are taking it seriously,” an official at one of the affected companies told Reuters. He declined to be named due to the sensitivities of the issue.
China imported a record 105 million metric tons of soybeans in 2024.
