Cofco to boost investments in Brazil to increase soy exports

Chinese state-owned agri-trader Cofco is to increase its investment in the soybean producing state of Mato Grosso in Brazil, it emerged this week, after the firm signed a statement of intent with the state governor.

Cofco CEO Johnny Chi and State Governor Pedro Taques signed an agreement of intent that could see Cofco double the investment it has already made in the Itiquira mill and increase exports of soybean to China from 3.5 million mt to 7 million mt.

“The company already has investments in Rondonopolis, Sorriso and Itiquira. With this protocol, the state undertakes, within the law, to grant tax incentives so that they increase their production here,” Taques said in a statement.

Cofco owns the largest crusher in Mato Grosso, a main soy producing state in Brazil, with capacity of 4,000 mt per day.

China is the world’s biggest importer of soybeans and Brazil is the largest exporter.

Economic Development Secretary Carlos Avalone said that as well as boosting soybean exports from the state, the investment would include building more silos to store beans and a new corn crushing plant for ethanol.

As well as tax breaks, in return for the investment Cofco is also seeking the state to complete 100km of a road to the port of Miritituba in Para which would connect the farms to two river ports and away from the congested ports of Paranagua and Santos.

"Since September, we have become the largest contractor of ships to ship Brazilian soybeans. Like the Chinese State, we also have our five-year planning in which we expect to have a much more important position in corn exports and soybean origin in Brazil, especially in Mato Grosso,” said Valmor Schaffew, president of Cofco South America.

China is expected to import nearly 100 million mt of soybean this year.