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COFCO, ADM boost Brazil grain exports, close in on Cargill

China’s COFCO International and U.S. Archer Daniels Midland Co (ADM) climbed the ranks of grain exporters from Brazil in 2017, setting themselves up for another record Brazilian crop this year, data collected by shipping agency Williams showed.

COFCO exported 9.3 million tonnes of grains including soybeans, soymeal and corn from Brazil last year, a four-fold increase from 2016, as acquisitions of Nidera NV and Noble Agri and an aggressive approach to farmers boosted volumes.

The Chinese firm passed two of the four “ABCD” sector players — ADM, Bunge Ltd, Cargill Inc and Louis Dreyfus Corp — in the Brazilian grain export rankings. It is now ahead of ADM and Dreyfus and closing in on Cargill.

ADM reported the second largest growth in volumes from 2016 to 2017, at 140 percent, reaching 8 million tonnes.

ADM completed investments last year of 280 million reais ($86 million) in the port of Santos, expanding its terminal capacity by 33 percent.

It also quadrupled capacity at its northern Barcarena port, a venture with Glencore Plc, cutting the cost of shipping soy and corn from top state producer Mato Grosso.

All other commodities traders saw increases in volumes last year, as Brazil rebounded from a poor 2016 crop due to drought and delivered a bumper crop in 2017. Stronger Chinese demand for soybeans also boosted numbers, particularly for COFCO.

“During the past two crops they (COFCO and ADM) have been very aggressive in the market,” said Arlindo Moura, chief executive of Terra Santa Agro SA, which grows grains on 158,200 hectares (390,920 acres) of farms in Mato Grosso.

“COFCO has access to the Chinese soy market of a kind that others lack,” he said.

Moura said farmers benefited from the aggressive approach of some traders. “They are in the market all the time, they give us options,” he said.

Zilto Donadello, who runs a 700-hectare farm in northern Mato Grosso, said competition among traders yielded benefits such as a 1.80 reais bonus per bag of soy as firms rushed to fill vessels.

Bunge and Cargill still top the ranking with 16 million tonnes and 12 million tonnes, respectively. Bunge’s shipments grew 45.6 percent, while Cargill’s rose 39 percent. The third-largest exporter, Japan’s Marubeni, shipped 10 million tonnes.

                (Volumes in million tonnes)
 TRADERS            2016          2017      PCT  
 ADM                3.33         8.02       140
 Bunge             11.11        16.18        45
 Cargill            8.76        12.16        38
 COFCO              2.17         9.30       327
 Louis Dreyfus      6.00         8.45        40
 Marubeni           9.38        10.01         6
Source: Williams shipping agency ($1 = 3.24 reais)

Source: Reuters (Reporting by José Roberto Gomes, Writing by Ana Mano and Marcelo Teixeira, Editing by Edmund Blair)

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