Brazil to negotiate soybean inspection framework after Chinese complaints, minister says

By Gabriel Araujo

SAO PAULO, March 17 (Reuters) - Brazilian Agriculture Minister Carlos Favaro said on Tuesday that the government will negotiate soybean inspection and safety requirements for Brazilian shipments of the crop to China, following complaints from Beijing.

Favaro said Brazil had not eased inspections in recent days, denying reports by local media that the government had made changes to make exports more flexible.

The minister confirmed that Brazil had received complaints from Chinese buyers and authorities after some cargoes showed the presence of weed seeds, and that it intensified inspections when the complaints persisted.

Media outlet Globo Rural reported on Monday that the Agriculture Ministry would hand over some soybean-inspection duties to shipping-supervision companies, after complaints from trading firms about the tougher inspection rules which they said made it harder to obtain export certificates.

"No rule was changed," Favaro said. "We have the legal obligation to inspect."

He added that vessels with pending inspections would receive certificates only if their cargoes met the standards required by China, the world's largest soybean importer. "If there had been any easing, the ships would be sailing," he said.

OFFICIALS HEAD TO CHINA FOR TALKS

Favaro said Brazil would send two ministry officials - Luis Rua, the agriculture ministry's secretary for trade and international relations, and Carlos Goulart, the ministry's agricultural protection secretary - to China next week to propose a sanitary protocol.

Brazil wants to negotiate terms that satisfy China's inspection demands, preserve the operating capacity of Brazil's industry and minimize risks, Favaro said.

He noted the dispute did not amount to an embargo by China. "If China had intended to suspend purchases of Brazilian soybeans, it would have suspended them. That is not the issue."

SHIPMENTS SLOW DURING PEAK EXPORT SEASON

Reuters reported last week, citing trade sources, that Brazil's Agriculture Ministry increased inspections on soybean shipments to China following Beijing's repeated findings of pesticide- and fungicide-coated beans.

Traders said the tighter checks were slowing shipments during Brazil's peak export season, raising costs and threatening to disrupt supplies to China. Delays in receiving export certificates have kept ships waiting at port longer than scheduled, resulting in penalty fees, they said.

Grain trader Cargill last week suspended Brazilian soybean shipments to China on the changes.

Still, Brazil's soybean shipping schedule remains little changed from a week ago, a report from grain exporters' group Anec showed on Tuesday. Exports for the month are estimated to come in at 16.32 million metric tons, slightly below last week's projection of 16.47 million metric tons.