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Trade

Brazil soy exports suffer blow from China's pork blackout

Falling demand for animal feed wipes out trade-war bonus

China has been importing fewer soybeans as African swine fever devastates its pig population.   © Reuters

SAO PAULO -- Brazil's soybean exports plunged 26% on the year in the first 10 months of 2019, as the declining Chinese pig population due to African swine fever slashed demand for animal feed.

China is Brazil's top export destination, with almost a third of all shipments headed to the country. Brazilian soy and soy product exports to China surged 34% last year, as the trade war prompted China to seek non-U. S. sources of the crop.

But the boom was cut short this year due to the outbreak of African swine fever. Soy and soy products exports to China began falling on the year in March, and dropped 37.8% in the July-September quarter.

A 10% decrease is expected overall for fiscal 2019 and fiscal 2020, according to a report published Thursday by Brazilian consultancy Agroconsult.

In the meantime, the Brazilian government is making a big push on pork exports, which soared 67.3% on the year in January-October. Still, the country's pork shipments to China are just one-fortieth of soy and soy product exports. Brazil's total exports to China could fall for the first time in three years in 2019.

Brazil is also facing trade pressures from the U.S. On Monday, U.S. President Donald Trump announced additional steel and aluminum tariffs on Brazil and Argentina, citing massive currency devaluations.

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