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Brazil wants China's help in builidng soybean road, rail infrastructure

(Tuesday, March 23, 2004 -- CropChoice news) -- Bloomberg news: Brazil's Foreign Minister Celso Amorim is lobbying China to help finance railroads, roads, agriculture and mining in South America's largest economy to speed the flow of soybeans, meat and minerals to China.

Brazilian exports to China soared 80 percent to $4.29 billion last year, driving sales in the South American country by iron ore miner Cia. Vale do Rio Doce and U.S. grain trader Cargill Inc. Brazilian President Luiz Inacio Lula da Silva is seeking financing to reduce bottlenecks on roads, railways and ports to boost exports and revive the economy.

Amorim, on a three-day visit to Beijing ending tomorrow, has proposed projects that include jointly searching for uranium in Brazil during meetings with Ma Kai, China's top planning official, Brazilian embassy officials in Beijing including Paulo Joppert, first secretary in charge of political affairs, said. Amorim also met with Premier Wen Jiabao and Foreign Minister Li Zhaoxing.

``China is a priority for Lula's government,'' Edmundo Sussumo Fujita, chief of the Asia department at Brazil's Foreign Ministry, said in an interview at his Brasilia office. ``The whole world is paying attention to China, and Brazil is not behind that.''

Amorim's trip follows talks with lower-level government officials that began last year on export-promotion agreements, which Lula, 58, plans to sign in Beijing in May, the first visit to China in nine years by a Brazilian head of state.

Rail Links

Brazilian agriculture and trade ministry officials have proposed $5 billion worth of projects to Chinese trade and investor delegations over the last several months, including rail links to Chile's Pacific coast and stakes in a 1,500-square- kilometer (580-square-mile) soybean farm in northeastern Brazil.

China Grain & Oils Group, a unit of the State Grain Administration, plans to send a team to Brazil in April to establish a joint venture to grow soybeans to be shipped back to China, said Luan Yinjian, an official at the company. The company hasn't settled on a partner yet or decided how much land it's prepared to lease or buy.

``Brazil has a lot of land and weather that's favorable for soybeans,'' Luan said. ``The U.S. market is too mature.''

China imported 3.82 million metric tons of soybeans in the first two months of this year, up 88 percent compared with a year earlier. That's up from an 83 percent increase for full-year 2003.


Rio de Janeiro-based Vale do Rio Doce is spending about $2 billion a year, in part on roads, rails and ports to ship more ore to China. While Brazil has doubled the size of the nation's soybean crop since 1997, overburdened rails and roads will make it difficult to keep up with demand from China, said Jose Luiz Glaser, who runs Cargill's soybean business in Brazil.

``The biggest obstacle to growth is a lack of infrastructure,'' Glaser said in an interview in Sao Paulo.

The Brazilian government is counting on a proposal in congress to create incentives for private companies to help fund government infrastructure projects to lure Chinese investment, Jose Amauri Dimarzio, executive secretary of Brazil's Agriculture Ministry, said in an interview last month. The lower house of Brazil's congress passed the bill last week.

``China is interested in building railways and also financing producers,'' Dimarzio said in Brasilia. ``The projects are excellent. We just need this partnership proposal to reduce the time to build them.''

A group of Brazilian executives traveled with Amorim to discuss ventures with Chinese companies.

Oil Exploration

State-controlled Brazilian oil company Petroleo Brasileiro SA and China National Petroleum Corp. held talks to form an oil exploration venture, while airline Viacao Aerea, known as Varig, opened an office in Beijing during the trip, according to Joppert, first secretary in charge of political affairs at Brazil's embassy in Beijing.

Vale do Rio Doce officials held talks about a proposal to build a $1.5 billion steel plant with Baosteel Group Co. in northern Brazil.

Vale do Rio Doce also held talks with China Minmetals Group about a proposal to build a $2 billion alumina refinery in Brazil, Mario Vilalva, head of the Brazilian foreign ministry's trade promotion department, said in an interview in Beijing.

``There's a huge entrepreneurial delegation in town, holding parallel meetings with Chinese officials in their specific fields,'' Joppert said.

Source: http://quote.bloomberg.com/apps/news?pid=10000086&sid=aUqjfwkEEJ0w&refer=latin_america#