During Xi Jinping’s visit to Brazil for the G20 Summit in November last year, China and Brazil signed a series of new deals outlining the phytosanitary and sanitary requirements for exporting Brazilian products to China. The newly approved products include fresh grapes, sesame seeds, sorghum, fishmeal, fish oil, and other fish-derived proteins for animal feed.
These new agreements hold significant commercial promise. Estimates suggest that exports of these agricultural goods could generate up to US$500 million annually.
Agriculture is a key sector for both countries. In Brazil, it accounts for 8.73 percent of the country’s national gross domestic product (GDP), employing 28 million people. In China, agriculture makes up 16.24 percent of GDP and employs 177 million people. These figures underscore the sector’s importance and the potential for stronger collaboration in food production and trade.
Bilateral trade
The trade relationship between China and Brazil has flourished in recent decades. China has been Brazil’s largest trading partner since 2009, becoming the first Latin American nation to surpass US$100 billion in annual trade with China. In 2023, bilateral trade reached US$181.53 billion—a 6.1 percent increase year-on-year.
Agricultural trade is a key driver of this relationship. In 2023, Brazilian agricultural exports to China hit a record US$60.24 billion, a considerable US$9.53 billion year-on-year increase. In 2024, Brazil accounted for 24.85 percent of China’s total agricultural imports, exporting US$58.6 billion worth of products—more than half of Brazil’s total trade with China. Key agricultural exports include soybeans, meat (such as chicken and beef), sugar, corn, and coffee beans.
Brazil’s dominance in key sectors is clear. Notably, in 2023, China’s total soybean imports reached 99.41 million tonnes. Brazil supplied a significant 70 percent of those – 69.95 million tonnes of soybeans – marking a 29 percent year-on-year increase. Similarly, in the same year, Brazil supplied 47 percent (12.81 million tonnes ) of China’s total corn imports.
This trade is mutually beneficial. China exports Brazil key agricultural inputs (like fertilisers and pesticides) which are crucial to the latter’s farming industry. The interdependence of their agricultural sectors highlights the importance of a stable, cooperative trade relationship to ensure food security for both nations.
Challenges and implications
Brazil, with its vast land resources and growing agricultural technology, has enormous potential to expand its agricultural exports. China, on the other hand, excels in refined management practices and boasts a comprehensive agricultural supply chain. Together, these nations can strengthen their agricultural cooperation, enhancing trade resilience and mutual growth.
In recent years, both nations have pushed to deepen agricultural cooperation. Brazil is eager to continue tapping into China’s expanding middle classes and their changing consumption habits, particularly for meat and edible oils.
At the same time, China’s interest in investing in Brazil’s agricultural sector is evident. Last year a deal was signed by the Export and Investment Promotion Agency of Brazil, the world’s largest coffee producer, and the Chinese coffee chain Luckin Coffee. Under the deal, the Chinese company will buy 240,000 tonnes of Brazilian coffee from 2025 to 2029, valued at US$1.4 billion. This further underscores the increasing commercial ties between the two countries in the agricultural sector.
Despite the promising developments, a significant trade imbalance remains. In 2023, Brazil posted a US$51.1 billion trade surplus with China, but this relationship is heavily skewed in favour of China. Brazil’s exports to China are dominated by a handful of commodities—iron ore, soybeans, crude oil, corn, and meat—which together make up 90% of its total exports. In return, Brazil imports mainly manufactured goods, such as electronics and machinery, from China.
Brazil’s reliance on a narrow range of exports exposes the country to significant risks. Fluctuations in global commodity prices and supply chain disruptions could severely impact local agricultural production, impacting local economies and workers’ livelihoods. For instance, market volatility in soy or beef exports could ripple through the country, affecting local producers and exporters.
Climate change impacts further highlight the need for diversification, as highlighted by Brazil’s coffee sector. Notably, in 2021, Brazil, which produces around 40 percent of the world’s coffee, lost a sizeable 10 percent of its crop, or 5 percent of the world’s production, due to frost and drought. This loss led to decreased revenue for the country’s farmers and exporters while disrupting global supply coffee chains. Prices also jumped by nearly 13 percent, hitting a high of 25.4 percent for one week in July.
These setbacks emphasise the importance of diversifying agricultural exports to mitigate vulnerability to domestic and external challenges.
The new trade agreements offer a potential pathway for diversification. Sesame is one such example. Brazil is the world’s seventh-largest exporter (around 151,000 tonnes in 2023) and 5.31 percent of the global trade. China remains the largest importer, snapping up around 36.2 percent of global sesame imports (US$1.53 billion). Reports indicate Brazil is increasing production to meet this rising demand. Fishmeal is another growth sector, with China leading global imports at US$2.9 billion. Yet, Brazil’s current market share stands at only 0.79 percent.
Challenges lie ahead. Can Brazil scale up production to meet this demand? That is one of the biggest questions. Sorghum exemplifies both the challenges and opportunities Brazil faces. In 2023, China imported US$1.83 billion worth of sorghum, making it the largest global market for the crop. However, sorghum exports from the U.S. dominate. U.S. sorghum trade with China alone brings in more than US$1 billion in trade. The country supplies around 56 percent of global sorghum exports followed by Australia at 23 percent. In contrast, Brazil’s share remains minimal. In 2023-2024, Brazil produced only 4.4 million metric tonnes of sorghum—just 0.29 percent of the global market. With its exports of the crop even smaller, this raises concerns about Brazil’s ability to meet China’s growing demand.
Despite these challenges, there are signs of progress. Brazil has already doubled its sorghum output in recent years due to expanded plantings. And with new trade agreements in place, the country has an opportunity to further increase production. However, Brazil faces significant hurdles, including harvests that are 40 percent smaller than those in the U.S. and limited export capacity. With China expected to import around 90 percent of global sorghum exports, Brazil may find itself under pressure to scale up production quickly to compete.
In the long run, success in the sorghum market could reshape Brazil’s agricultural exports, diversifying its offerings and reducing dependence on a narrow range of commodities. Increased production would help Brazil capture a larger share of the global market, especially China, and contribute to a more resilient and diversified agricultural export strategy. This expansion would be a crucial step in reducing Brazil’s dependence on a narrow range of commodities.
Conclusion
Brazil’s efforts to scale up production of sesame, fishmeal, and other agricultural products show promise. But success depends on overcoming key production and infrastructure challenges. By leveraging new trade agreements and expanding its domestic output, Brazil could become a major player in the global market for these products. The coming ears will be pivotal in determining whether Brazil can rise to meet these challenges and seize new opportunities in global agricultural trade.
