The ongoing Russia-Ukraine conflict has created ripples throughout many channels of the trade finance industry, not least the agricultural sector. 

In response, China has turned toward Brazil in a bid to diversify its corn imports, of which about 70% came from the United States and 30% from Ukraine last year. 

The decision seems to have come as a natural stepping stone, considering China already buys most of the soybeans from Brazil. 

This follows an agreement reached in May that guarantees Brazil access to the world’s largest grain market in the long term.

Beijing will temporarily suspend a key clause that paves the way for Brazil, the largest exporter behind the United States, to ship corn to China in the coming months. 

The agreement stipulates that the Brazilian government should provide farmers with advice on chemical application and crop management before planting in order to prevent disease outbreaks.

China will waive that condition in light of current events. If the rule still applied, it would hamper shipments because it was imposed after planting began.

Even Pay, an analyst at consultancy Trivium China in Beijing, said, “It’s pretty clear that Beijing is looking to smooth the way for Brazilian maize to replace the maize it would typically buy from Ukraine.”

He also added, “Beijing is extremely unlikely to seek to cut US corn imports.” 

Despite the waiver, China has not lowered the bar on health requirements, as the country has made it clear that shipments with any disease listed as intolerable by local authorities will be refused. But this no longer requires measurements before sowing.