China to allow Brazil's ethanol by-product amid Lula visit, US-China trade war
BEIJING, May 13 (Reuters) - Brazil signed protocols with China on Tuesday to allow exports of an ethanol by-product used in animal feed, challenging U.S. dominance in the market amid ongoing China-U.S. trade standoff.
The deal, outlined in a Brazilian government document viewed by Reuters, underscores Brazil's push to strengthen agricultural ties with China as President Luiz Inácio Lula da Silva visits the country, and as rising domestic DDG production fuels the search for alternative markets.
Distillers dried grains (DDGs) are highly valued in animal feed, particularly for pigs, cattle, and poultry.
In an interview with Reuters on Monday, the president of Brazil's National Corn Ethanol Union (UNEM) said Brazil and China have been working since 2022 to finalise a sanitary agreement for DDG exports, adding current "broad geopolitical shifts" present a favourable time to conclude the deal.
"It opens up an opportunity for Brazil to become another supplier, another option for China to source animal nutrition products. For us, it means re-establishing and strengthening the relationship between the Brazilian and Chinese markets, which share multiple mutual interests," Guilherme Nolasco added.
In 2024, the U.S. was nearly the sole supplier of DDGs to China, dominating the market with 99.6% of imports by volume, valued at $65.7 million, the Chinese customs data showed.
According to Nolasco, over 10 new plants are under construction and set to begin production within the next two to three years for corn ethanol and DDG, coinciding with the opening of the Chinese market.
Nolasco expects DDG production in Brazil to potentially reach up to 5 million tons in 2025/26.
In April, Agriculture Minister Carlos Fávaro revealed that Brazil is nearing a deal with China to allow DDG exports.
Separately, both countries also signed protocols for the export of poultry and extractive fishery products from Brazil to China, according to the document.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
15 minutes ago
- Reuters
ECB cuts inflation, growth projections
FRANKFURT, June 5 (Reuters) - The European Central Bank cut some of its growth and inflation projections on Thursday as the fallout from a global trade war is likely to prove a drag for the 20-nation euro zone. Inflation is now seen falling further below the ECB's 2% target next year as lower energy costs, a stronger euro and weak economic growth all weigh on prices. Price growth will then rebound in the following year and come back to target, the ECB predicted. A muted outlook for both economic growth and inflation is why the ECB cut interest rates again on Thursday, lowering the deposit rate by a combined 2 percentage points since last June. That may not be enough, however. Markets see between one and two more rate cuts this year as growth remains anaemic and there is no meaningful rebound on the horizon. The following are the ECB's projections for inflation and economic growth. Previous projections from March are in brackets. GDP Growth: 0.9 (0.9%) 1.1 (1.2%) 1.3% (1.3%) Inflation: 2.0 (2.3%) 1.6 (1.9%) 2.0% (2.0%)
Economist
18 minutes ago
- Economist
Now China's ultra-cheap EVs are scaring China
China's ability to make electric vehicles (evs) cheaply has caused angst in countries with big carmakers, prompting governments to investigate China's subsidies for the sector and to erect trade barriers. Now, though, it is China's own government that is worrying about how cheap its producers' evs are. The race to the bottom shows no sign of letting up, and the industry has become emblematic of some of the broader problems facing the economy. On May 23rd China's biggest ev manufacturer, byd, caused shockwaves when it slashed the cost of 22 electric and hybrid models. Now the starting price of its cheapest model, the Seagull, has fallen to a mere 55,800 yuan ($7,700). The move came just two years after byd had originally unveiled the electric hatchback, at a then astonishingly low cost of 73,800 yuan. The latest move triggered official concern about how low prices could go in the world's largest car market. On May 31st China's industry ministry told Xinhua, the state-run news agency, that 'there are no winners in the price war, let alone a future.' The ministry vowed to curb cut-throat competition, which it said harmed investment in r&d, and could cause safety problems. On June 1st People's Daily, the Communist Party mouthpiece, argued that low-priced, low-quality products could harm the reputation of 'made-in-China' goods. The backlash comes as leaders crack down on unproductive, self-harming competition between firms and local governments that has created overcapacity and lowered profits. Their moves are part of a broader effort to rebalance the economy. 'Recent developments suggest the old supply-driven model remains intact,' Robin Xing, Morgan Stanley's chief China economist, wrote in a note. byd's shares fell after the price cuts and the official pronouncements, amid concerns that the price war will be unsustainable. But to cling to market share, other carmakers cut their own prices. Wei Jianjun, chairman of Great Wall Motor, one of the largest, called the industry unhealthy and invoked the collapse of the property market as a cautionary tale. 'Now, the Evergrande of the automobile industry already exists, but it just hasn't exploded yet,' he told Sina Finance, a news outlet, referring to the world's most-indebted developer. A byd executive responded that Mr Wei's comments were 'alarmist'. The situation is not helped by the fact that there are 115 Chinese ev brands, according to Jato Dynamics, a research firm. Only a few, including byd, make any money and are expected to survive in the long run. Brutal price wars are a common affliction across Chinese industries. By the end of last year's third quarter, nearly 25% of China's listed firms were in the red, more than double the proportion five years ago. Panic in Detroit Consolidation will take time and will be painful. byd is well positioned, given its scale and vertical integration. The firm controls everything from mining rights of minerals it needs to build its own batteries to cargo ships for transporting its cars to foreign markets. In November it sparked fears of even fiercer competition when it pressed suppliers to cut prices by 10%. Suppliers may now be squeezed further. That could mean layoffs and less money for car workers to spend, at a time when the government is playing up the need to boost weak domestic demand to help absorb the shock of the trade war with America. An increasingly tough market at home will fuel Chinese car exports. Reuters reports that byd plans to sell over half of its cars overseas, especially in Latin America and Europe, by 2030. That would be a big jump. China accounted for about 90% of the firm's 4.3m car sales last year. But the higher prices that evs command abroad could offset the ever-smaller margins in China. And it is making inroads in spite of stronger trade headwinds. In April, despite the eu's increased tariffs on Chinese evs, byd sold more of them in Europe than Tesla, an American rival, for the first time. Though the price war is at its worst in China, its ramifications will be felt worldwide. Cheaper evs would be a silver lining, but that will be little comfort for governments already anxious about China exporting overcapacity to their markets. More trade tensions are inevitable. ■
NBC News
20 minutes ago
- NBC News
Trump says he will travel to China to meet with Xi
President Trump said he had a "very positive" call with his Chinese counterpart President Xi Jinping, regarding tariffs and said he plans to travel to China to meet with the leader. Trump made the announcement during his meeting with German Chancellor Friedrich Merz who was visiting the White House for bilateral talks.
