China to solve soy supply problem?

- Last updated on GMT

After years of struggling to meet increasing domestic demand for
soy products, Chinese government officials believe that discussions
with the Brazilian government may have solved the problem. Trade
talks held in Beijing this week have reached a commercial agreement
which could see vast swathes of Amazonian forest cleared in order
to grow future crops for the world's most populace country.

Brazilian president Luiz Inacio De Silva's visit to China looks set to see sway the Chinese government towards closer economic ties with the south American nation, ultimately leading to a significant increase in Brazil's biggest international trading commodity.

China is currently faced with the problem of feeding a population that is currently estimated at between 1.2 and 1.4 billion people. Soya bean and its derivatives are a leading source of protein for many Chinese people, but growing demand has been putting increasing strain on world supplies, making it an increasingly hard to find and expensive commodity to source.

In recent years the Chinese government has made increasing efforts to increase the domestic farming of soya bean, but the increasing erosion of arable land and challenging climate conditions has meant that such efforts have met with limited success.

The five days of talks in Beijing involved Brazilian government leaders from both country's as well as Chinese cabinet ministers, states governors and around 450 business leaders.

In the last year three years total trade between the two nations has increased five-fold to €8 billion, much of that derived from the trade in soya beans.

Following the meetings, the Brazilian agriculture minister, Roberto Rodrigues, said that the country currently had 62 million hectares of land planted for agricultural crops and that a further 90 million hectares is soon to be occupied for the same purposes. The growth in arable land use is being largely attributed to the planting of soy crops, which the government says could solve China's short falls in domestic demand.

Although farming and ranching has expanded quickly throughout the Amazon rainforest in the past ten years, news of the China deal is still expected to met with criticism from environmental agencies such as Green Peace. The organization has made no official statement about the announcement.

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