Brazil Selling Itself to China as Best Place for Investment

Paranaguá port in the south of Brazil Seeking investments in ports and roads from China, its largest market for agricultural products, Brazil, the world's largest exporter of poultry and second-biggest supplier of soybeans, wants to see the Chinese investing much more in the country.

"The biggest difficulty we have is logistics," said Célio B. Porto, Secretary of Agribusiness for International Relations at Brazil's Ministry of Agriculture, Livestock and Food Supply, in an interview in Singapore. "Our biggest problem in improving our production is lack of capital."

Brazil needs better transportation for a smoother flow of goods to port, Porto said in Singapore. The country supplied products including soybeans, frozen meat and tobacco worth US$ 11 billion to China, accounting for about a fifth of its agricultural exports, he said.

China, which has one-fifth of the world's population and seven percent of the planet's arable land, has been looking to the Philippines and Africa for strategic food supplies. The country is the world's largest buyer of soybeans, according to the US Department of Agriculture.

"The investments China has been making in Asia and Africa represent future production. Brazil's competitiveness comes from having present production," Porto said. "While Africa has a lot of land, it doesn't have the technology or the responsiveness Brazil already has to meet China's needs," he added.

Porto is leading a government delegation to Singapore, Hong Kong and China to expand markets for its products. Last year's exports to Hong Kong were valued at US$ 1.2 billion, and to Singapore, at US$ 298 million, he informed.

Brazil is seeking to benefit from scandals, such as the one in China involving milk and other products tainted with melamine.

"There's an increase in demand for our dairy products where Australia and New Zealand are the biggest exporters for Asia. The same is happening in eggs," Porto said. "This was what happened with Brazilian beef exports when there was 'mad cow disease' in the U.S." in late 2003.

Meanwhile, the global credit crisis and a decline in prices of food grains from records may lower investments in agriculture, causing future food shortages, he said.

"With this fall in prices of agricultural products in the world, the lack of investment in these products will occur first where the cost of production is higher and that is not the case in Brazil," Porto concluded.




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