Cofco to increase Brazil soybean purchases 5% per year

Chinese state-owned agribusiness and trading house Cofco International expects to buy 5% more soybeans per year each year for the next five years as part of its strategy to deepen investment in Brazil, the company’s chairman said in a speech Monday.

Speaking at Brazil’s 2019 Agribusiness Congress in Sao Paulo, Johnny Chi told the audience that his company would increase purchases of Brazilian soybeans, invest more in infrastructure and do so in a sustainable way.

“Brazil is one of the world’s major producers and Cofco is a large and enthusiastic buyer. We expect to buy 5% more Brazilian soy by volume each year for the next five years,” Chi said.

“There may be bumps along the road, as we have seen with the US-China trade relationship, but from Cofco’s point of view, the long-term relationship between our countries and our businesses looks very solid.”

Chi said the company would increase its investment in infrastructure such as “storage, processing and ports” but only if there was a “continued existence of a stable and predictable investment environment.”

Following its acquisitions of Nidera and Noble Agri in 2014, Cofco International now has more than half of its assets in South America and was in 2018 the fourth largest purchaser by company of Brazilian soybeans after Bunge, Cargill and Louis Dreyfus Company.

Based on 2018 figures of 11 million mt, the purchases would see Cofco buying 14 million mt per year by 2025 – approximately 15-20% of total international sales.

The statement comes as the US and China are in a trade war that has seen the latter slap prohibitive taxes on US soybean imports, leaving Chinese crushers to source more soybeans from Brazil.