By Laurie Chen, Mei Mei Chu, Ella Cao and Naveen Thukral
BEIJING (Reuters) -China, the world’s biggest soybean buyer, has stopped receiving Brazilian soybean shipments from five firms after cargoes did not meet phytosanitary requirements, according to a statement from the Brazilian government confirming what Reuters had learned from two sources on Wednesday.
The 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.
The Brazilian agriculture ministry said the “non-conformity” notice it received from China’s General Administration of Customs 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.
The parent firms of the affected companies did not immediately respond to 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.
The Brazilian agriculture ministry said the GACC detected the presence of pesticides and pests on a routine inspection of cargos.
“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.
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.
With worries of renewed Washington-Beijing trade tensions, China secured nearly all of its soybeans from Brazil for first-quarter shipment ahead of Donald Trump taking office as president.
It was not clear how long the suspension would last, although traders expected it to be short-term.
“It depends mainly on how quickly the Brazilian companies can provide proof that they found out what was wrong that led to these inconformities and provide a plan to fix that,” the first source said.
“This can become a big deal if they don’t find a solution soon,” said a Brazil-based trader on condition of anonymity. He said the efficiency of port operations is crucial to keep product flowing.
The suspended firms are units of some of the biggest soybean suppliers to China.
“We are taking it seriously,” an official at one of the affected companies told Reuters. He declined to be named due to sensitivities of the issue.
China imported a record 105 million tons of soybeans in 2024.
This post is originally published on INVESTING.
