BRF a major producer of pork and chicken in Brazil has agreed to purchase a company in the Henan Province of China. In addition to the $43 million price for the facility, BRF intends investing an additional $36 million to expand production anticipated during the spring of 2025. Capacity will be expanded from 30,000 to 60,000 metric tons annually. The acquisition will provide BRF with a direct access to the market in China.
The announcement was made during the state visit of President Xi Jinping to Brazil where he met with President ‘Lula’ da Silva. The respective leaders of the nations agreed to explore “synergies between the Chinese Belt Road Initiative and development programs in Brazil.” Currently Brazil and China share more than $150 billion in bilateral trade. President Xi commented on the shared geopolitical and economic interests of their nations.
Other developments arising from the state visit included the Brazilian State Bank BINDES arranging for a $700 million loan from the China Development Bank and an agreement on an orbital satellite venture in collaboration with Telebras the state telecom provider for Brazil. The Agricultural Ministry of Brazil also announced additional agricultural exports to the value of $450 million including sorghum, fruit and fish meal.
Under the Biden Administration, agricultural trade with China has contracted and it is anticipated that with a more aggressive tariff policy in 2025, exports will decline further with nations including Brazil displacing U.S. products to the detriment of the U.S. agricultural economy.