Chinese can not invest in Mato Grosso because of bureaucracy

Chinese can not invest in MT because of bureaucracy

Investors come to the country, but are barred by rules difficult to be fulfilled and complex environmental legislation

Source: Ascom Aprosoja
5/24/2013

The deficit is a logistical issue discussed in all regions covered by the entourage of the 8th tour by Aprosoja. On Thursday (23), the event was in Agua Boa, eastern region of Mato Grosso, the municipality which is between those who have a greater capacity for agricultural expansion through conversion of pastureland to cropland. There are at least 431,000 hectares that can be used for agriculture, according to the Mato Grosso Institute of Agricultural (IMEA).

But that which hinders this expansion is the lack of alternatives to ship out of the region the soybeans. Producers questioned during the tour the executive Lin Tan on why the Chinese do not invest in infrastructure in Mato Grosso since the state is the main customer of China with 70% of soybeans produced being sent to the country. "It is very difficult to invest in Brazil. We want to invest, but here there are many rules and regulations, actually more bureaucratic than China's, "said Lin.

For producer and delegate Aprosoja the municipality, Junior Garruti, the big problem in Brazil is that governments do not fulfill their duty. "The government does not decide what is priority. Failure is a cultural problem, our government does not have a voice. Many ministries are created and ends up messing up the other one and sends another stop working, "said Garruti.

Lin Tan also explained that many Chinese businessmen come to Mato Grosso with the intention of investing in silos, railways and ports, but the first difficulty is to find the right people to deal with these investments. "The Chinese are convinced that the government is taking care of these investments here because in China the government controls everything. And when they get here there are people in government. We understand that there are business opportunities here, but if we do not find the right person to make this happen, there is no business, "he clarified.

But when that first step is overcome, the second is the investors and the beneficiaries meet. The Chinese need to make sure that the project is a good investment and have some form of collateral. According to Lin Tan, then they find another big problem, environmental legislation. "Environmental regulations in Brazil and Mato Grosso are much stricter than in China. Here's indigenous reserve and several other licenses are required, there is a lot of bureaucracy, "he explained.

According to producer José Luiz Polizeli, one of the issues that attracted the most attention in his talk was the control that the Chinese government has on the country. "I never imagined that the Chinese government could be even more bureaucratic than ours, the feeling of having control over everything," he said. It's the first time he participates in the tour and the experience was odd. "I really enjoyed the lectures and they had a very good approach which forced us to imagine some situations and think about the future of the market. It's very different to have a representative here exposing the reality of each country. One thing is to read about it, but the other is able to take your questions there personally, "he added.

The tour is a realization of Aprosoja
 Aprosoja and the National Rural Education (Sennar-MT), sponsored by BASF, Bayer and Syngenta.

 

Conab corn buying program

US$ 3.35/bushel for Mato Grosso

MINISTRY OF AGRICULTURE, FISHERIES AND FOOD SUPPLY
MINISTRY OF FINANCE

OFFICE OF THE MINISTER

INTERMINISTERIAL ORDINANCE # 330 OF 22 MAY 2013

THE MINISTERS OF AGRICULTURE, FISHERIES AND FOOD SUPPLY AND FARM, using the powers conferred on them by art. 3-A of Law No. 8427 of May 27, 1992, in view of the resolution of the National Monetary Council in 3711, of April 16, 2009, the shelter provided by the Policy of Guaranteed Minimum Price - PGPM, dealt Decree-Law No. 79 of December 19, 1966, and the provisions of Case 21000.000656/2013-25, resolve:

Article 1 There are established the following parameters for the release of Put Option Agreement audience (COV) for corn grain crop in 2012/2013 and 2013 through public auctions to be conducted by the National Supply Company-Conab:

I - participants: farmers, directly or through their cooperatives;
II - contract expiration: November 29, 2013;

III - exercise prices:
a) for the States of the South, Southeast and Midwest (except MT): R $ 19.74 / 60kg;
b) for the states of Mato Grosso and Rondônia: R $ 15.12 / 60kg;
IV - Unit of measure of the contract: 27 (twenty seven) tons;

V - bringing the exercise of the contract: it is admitted by decision of the Ministry of Agriculture, Livestock and Supply (MAPA), the anticipation of the exercise of the contract, deducting for each month in advance
R $ 0.46 / 60kg for States relating to paragraph "a" of section III and R $ 0.42 / 60kg for the United referring to item "b" of section III;

VI - winning COV: may be from the month of August, complying with the criteria set out in section V;
VII - volume features: up to R $ 580,000,000.00 (five hundred and eighty million dollars), the limited budget of the Official Credit Operations - OOC, under Public Training Inventories;

VIII - the date of the auction, participants must have registration in good standing in the Unified Registration System Providers (SICAF) and, on the date of exercise of the option, be in good standing with the Informative Credit Unpaid Federal Public Sector (CADIN);
IX - MAPA may establish limit purchasing contract by auction, for each farmer, directly or through their cooperatives.

Article 2 The operations of VOC shall additionally comply with the conditions laid down by the National Monetary Council Resolution No. 3711 of April 16, 2009.

Article 3 This Ministerial Ordinance shall enter into force on the date of its publication.
ANTONIO ANDRADE
Minister of Agriculture, Livestock and Food Supply
GUIDO MANTEGA
Minister of Finance
D.O.U., 23/05/2013 - Section 1

Brazil gov´t buying 2 million tons of Mato Grosso corn

CORN: MT PRODUCER WAITING REACTION AFTER GETTING 28% HIGHER PRICE

The logistics issue is crucial in Mato Grosso and it is time to decide for the producer to expect the government's actions to remove corn from the market - which should support the price - or negotiates part of the second season now and reduces the need for storage.

According to the Mato Grosso Institute of Agricultural Economics (IMEA), the silo bags have been an alternative for farmers who want to wait for a reaction in prices, but the output is still "emergency".
"Considering the value of the silo bag without machinery, the cost per bag of corn with such alternative is around R $ 0.40 to R $ 0.50," said the IMEA in informative.

Those who can not afford this have traded production at a value below the operating cost.

"For those who expect high productivity, the market share of production now reduces the problem of lack of storage," says the institute.

Mato Grosso began selling corn harvest 2012/13 to R $ 15.96 / bag (quotation november/12), but only 6% of the production was closed this value. In January prices fell to R$ 14.01 on average. In May, with 4.5% of businesses closed, the average was 28% lower than in November, around R $ 11.53 / bag. The government indicated it will pay for corn Mato Grosso R$ 15.12 / bag, value, according to the IMEA covers the costs of production. But the volume of 2 million tons in option contracts is considered low. "Supports only 12.5% ​​of the entire crop," he says.

Today, the marketing of Mato Grosso corn reaches 26.7% of the total production for the season 12/13, equivalent to 4.3 million tons of the16.05 million tons expected for the current cycle. The expectation by IMEA and market agents is that businesses follow retracted to a marked improvement in prices by sellers. In the state, prices range from R $ 10.90 / bag in Sorriso, R $ 11.30 / bag in Lucas do Rio Verde, R$ 14.80 / bag in Primavera do Leste and R$ 15.40 / bag in Rondonopolis. The second season has buyer R$ 14/sac Rondonopolis but seller asks R$ 16/sac. In the mid-north, a buyer's market R$ 9/sac, compared to R$ 12.50 Seller / bag.

In Paraná, poor provision of sale, and stable prices. Yesterday, the Department of Agriculture reported that the marketing of the summer harvest is only 55% of the production and the sale of second crop is stuck at 7% of the expected volume. The harvest of the second crop corn has not yet begun in the state.

Bunge Yara merger green light

Cade approves purchase of fertilizer assets of Bunge by Yara

By Thiago Resende | Value

BRASILIA -  CADE approved without restrictions, the business in which the Norwegian fertilizer company Yara International intends to acquire Brazilian fertilizer assets of American Bunge.

Announced in December last year, the operation is estimated at $ 750 million. The purchase involves "virtually all assets related to the fertilizer business of Bunge in Brazil, consisting of mixing units located in 22 locations throughout Brazil", 16 owned and six leased, according to information sent by the businesses to Cade. Additionally, other assets such as a phosphate factory will also be acquired by Yara.

"The only asset used in the fertilizer business by Bunge Group that will not be transferred to Yara's Termag, a port terminal used for fertilizer in the port of Santos,"  companies completed to notify the transaction to the national antitrust.

Yara The group primarily operates in the production and sale of fertilizers, and sale of ammonia. Thus, companies recognize the business generates a higher concentration by the Norwegian market, but without "cause any competitive concern, in view of the "high rivalry" in the industry.

The process was analyzed by the new law antitrust and now, with the endorsement of Cade, companies can perform the operation. The green light was given by order of the Superintendent-General of the agency published today in the "Official Gazette" and therefore the case does not need to undergo trial in plenary Cade.

Mato Grosso corn and railroads

A few news items in the news today.

Brazil government plans to buy 8 million tons of
2nd crop corn to help prop up prices and help
with logistics to get Mato Grosso corn to the
Northeast and to the ports.

Spot Mato Grosso corn is at US$ 2.72/ bushel locally(Sorriso.)

Govt will come in at R$ 15/sac which is about US$ 3.40/bushel.

This will help buffer the surge.

Also this week progress on East/West railroad details.
After 3 years of dilly dallying, it will become official that
Lucas do Rio Verde will be the site of a dry port and
railway depot. Various public announcements are being
scheduled from Brasilia to Cuiaba to Lucas.

Lots of pats on the back and congrats will be handed
out again. Just like three years ago!!!!!!!!!
I was there......
I have heard and seen all this before.

Let us hope during the upcoming dry season BR 163
can get 90% paved to Santarem and maybe in 2014
we can break ground on the railroad.
The new forecast for a functioning railroad is now
2017/2018 crop year. I can hardly wait.

NE drought

Near Bom Jesus, Piaui, Brazil

Soybeans being disked under due to extreme drought conditions

NE Brazil

Warm and sunny

Another warm and sunny week in central Brazil.

I know many analysts are talking circa 78 mmt tons

for the total Brazil corn crop. The 2nd crop keeps

getting bigger. I kinda doubt it. It will be big but

not Mega big. Too much of the 2nd crop corn got planted

in late February and early March. The rains ended at

the normal time of mid April. The last corn to be planted

will not be much. It might be just a cover crop.

There is a corn plant but no cob.

I also am hesitant to rubber stamp the recent media

reference to a 1.2 million hectare increase in Brazil´s

planted area of soybeans for 2014. I really doubt that.

The last two years we have seen the surge in soybean area

for Brazil. It is time to stand pat and plateau for a bit.

The USA will likely plant copious amounts of soybeans

before this late season is done. The USA will likely produce

3.5 billion bushels of soybeans in 2013. Let us hope China

imports 69MMT of soy in 2014 or look out below.

INCRA recently released a parcel of land to a foreigner

group. We have been in a holding pattern with regards

to this tract for one year. A good sign and good news for

those interested in Brazil land.

Brazil land is still a bit pricey. Asking prices in sacs of

soybeans are still firm.

Thank you to all the newsletter renewals of late and

VIP clients that confide in me. Very much appreciated.