China

Cofco agrees to major distribution deal with US partner

By RJ Whitehead

- Last updated on GMT

© iStock
© iStock

Related tags: Maize, Export

Cofco, the Chinese state-owned grain major, will form a partnership with American co-operative Growmark in a bid to improve control of its import chain. 

The distribution deal is the latest move in Cofco’s strategy to get more access to the food it imports. 

It has already recently invested US$3bn in the purchase of Noble Group’s agribusiness and acquired a substantial stake in Dutch grain trader Nidera. 

The latest deal will give China the ability to receive some 180,000 grain bushels each hour by truck and rail. 

River barge deliveries will increase this volume by about 60,000 bushels per hour. 

Both companies will unite to source the grain from Cofco’s office in St Louis, the companies said in a statement. 

The deal draws a more direct link between a large Chinese food importer and farmers in the world's largest corn exporter and second-biggest soybean exporter.

China’s huge market — the world’s biggest for soybeans — is proving attractive to Growmark. 

Brent Ericson, its senior vice-president for member services, said: "It gives us more of a direct pipeline to those end-users​. 

Economics dictate where grain moves, but all things being equal this gives us a leg up in the Chinese market​," Ericson said.

Cofco has been exploring potential North American link-ups through partnerships or acquisitions over the last year.

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