The Brazilian food commodities trader talks about the growth of Chinese bean imports and current market conditions.

By wpengine

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It takes a lot of beans to supply the world’s fifth largest population with its favorite staple food. Seven out of ten Brazilians consume beans, mostly the black and carioca varieties, on a daily basis; that adds up to an average 19 kilos per capita annually. Historically the country has been able to produce its own supply of beans, more than enough to meet the voracious demand without the need to import.

Lately, however, weather-related problems and competition with export crops have made it difficult for the world’s largest bean producer to meet local demand. Imports from Argentina and China have increased, creating competition for Brazilian producers. Jorge Burmann, CEO at Burmann Alimentos, sounds in on the situation and what it means for the future of the Brazilian bean industry.

IFT: Last year the amount of black beans Brazil imported from China was more than double the previous year and that figure has been increasing since 2010. Do you expect the trend to continue this year?

pulse-interview-jorge-burmann-ceo-at-burmann-alimentos-charlie-higginsJorge Burmann: Yes. Imports from China will continue to grow because consumption is increasing and the market supply of black beans is down. This is mostly due to climatic problems, the tax burden among Brazilian states, and major competitors soybean and corn dividing up the production area. It is basic market law: when supplies are down, prices increase, and the industry must meet the demand. Moreover, beans have been an indicator of inflation.

IFT: Do you think growers will turn to other crops like soybeans and corn? Do you believe the recent increase in imported black beans is a temporary trend or long term reality?

JB: It is unlikely that farmers will start planting soybeans and corn, which are in high demand on the international market, at the expense of beans. In the medium term we will continue to import beans from Argentina and China.

IFT: What is the relationship between carioca beans and black beans in the Brazilian market? How do you expect that balance to look this year?

JB: The consumption of carioca beans and black beans depends on the region. For example, in Rio Grande do Sul, black beans comprise 90% of consumption, whereas in the middle of the country it’s 60% carioca bean and 40% black bean. In recent years the price of carioca beans has been higher than the price of black beans because consumption of this product was so much higher in the center of the country. This year we will not likely see a balance of price and supply.

IFT: How would you like to see Brazil’s bean industry change? What role does your company play in the industry?

JB: It would be nice for the market if prices and supplies were balanced, without so many ups and downs. Burmann has been able to encourage more producers to grow a product that is so important in the Brazilian diet.