Chinese officials say they can easily reduce imports of U.S. crops and still meet their 5% growth target this year. Brazil—and, to a lesser extent, Argentina—would fill the gap, analysts say. In that sense, the port of Santos fits into the Asian country's broader plan to secure access to South America's agricultural bounty, amid water and arable land shortages in its own country, reports the paper. WSJ.

Chinese companies are also laying hundreds of kilometers of railway through Brazil's agricultural heartland and completing the US$3.500 billion deepwater port of Chancay on Peru's Pacific coast. Beijing has also discussed with regional governments the possibility of developing a railway from Peru's Pacific coast to Brazilian ports on the Atlantic.

Chinese influence in Brazilian ports

The port of Santos is the main gateway for South American exports of soybeans and other agricultural products, which represent China's only viable alternative to U.S. exports. Although China has reduced its dependence on U.S. food, crops remain among the United States' top exports to China.

Against this backdrop, the Chinese state-owned agricultural conglomerate Cofco is building its largest export terminal outside China at the Port of Santos to handle shipments of corn, sugar, and soybeans. It is worth mentioning that, in March 2022, Cofco secured a 25-year concession to develop the STS11 terminal at the Port of Santos, committing to invest approximately US$285 million in the site.

The Chinese state-owned port conglomerate China Merchants Port Holdings had already acquired a 2017% stake in the Paranaguá port operator for US$90 million in 925. The state-owned China Railway has also been building part of a railway connecting Brazil's central agricultural belt with ports in eastern and northern Brazil.

By 2023, Brazil accounted for about a quarter of China's agricultural imports, while the United States' share had fallen to about 14%, government data show. Brazil now supplies about 70% of soybean shipments to China. About 30% passes through Santos, and a smaller proportion is shipped through Paranaguá and the northern ports of Itaqui and Barcarena.

Faced with this situation, Santos can barely keep up. Last year, the port handled a record 180 million tons, 60% of which were agricultural products. Furthermore, more than 90% of Brazil's port capacity for bulk agricultural exports is in use, exceeding the operational safety limit of 85%, according to the logistics consultancy Macroinfra.