China is deepening ties with agriculture powerhouse Brazil, with a unit of the Asian nation’s largest food company set to open a new terminal in the port of Santos at the end of March.
Cofco International Ltd. is starting operations at the grain and sugar terminal as part of the company’s strategy to catapult itself into the upper ranks of global agricultural traders. It comes as China has been seeking out alternative grain suppliers as US President Donald Trump ratchets up tariff threats.
Agricultural powerhouse Brazil has become key to China’s efforts to diversify its purchases — it now supplies most of China’s soybeans and corn, dwarfing the US’s share. Cofco said Friday it sources 70% to 75% of its soybeans from Brazil.
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Cofco forecasts that the new terminal will ship 8 million tons of agriculture products this year, including 5.5 million tons of soybean and corn, and 2.5 million tons of sugar. In total, the company expects to ship as much as 18 million tons of soy and corn from Brazil in 2025.
The soybeans and corn volume leaving from the new Santos facility in 2025 will be similar to the total last year from two different terminals in that port, but the new site will be cheaper and faster, Sérgio Ferreira, operations director in Brazil for Cofco International, said in a presser.
“With our own grains elevators, we expect to reduce costs by 10% to 15%,” Ferreira said.
Cofco won a concession in 2022 to build the Santos terminal. Once focused on trading and producing agricultural products for the Chinese government, the company now handles crops to over 50 nations. However, Cofco’s overseas expansion is being complicated by Trump’s vow to enact a 10% levy on Chinese goods. That threat may be blunted by Cofco’s big bet on Brazil.
While last year the Chinese company was able to ship a Panamax vessel, with roughly 70,000 tons of grains, every two or three days from Santos port, the new terminal will allow it to load two vessels a day, Ferreira said in an interview.
Cofco plans to open the terminal to other merchants next year, with roughly a third of the volume expected to come from other companies.