BEIJING, Nov 20 (Reuters) – A Chinese state-owned firm, COFCO International, has secured agricultural trade deals totaling $5.2 billion with major global traders including Cargill and Louis Dreyfus Company (LDC), according to a statement released Monday.
The agreements will see COFCO International purchase grains and oilseeds from the companies over the coming years, bolstering China’s food security and expanding the reach of these international agricultural giants within the world’s largest consumer market. The deals encompass a variety of commodities,including soybeans,corn,wheat,and barley,with deliveries scheduled to begin in 2024. This move underscores China’s continued commitment to diversifying its import sources and strengthening relationships with key agricultural suppliers amid global supply chain uncertainties and fluctuating commodity prices.
COFCO International, the overseas arm of China’s largest food processor, COFCO Group, signed the agreements during a trade delegation visit to China. Cargill will supply $1.8 billion worth of agricultural products, while LDC committed to $1.7 billion. Further deals where struck with other traders, bringing the total value to $5.2 billion.
“These agreements demonstrate the strong and growing partnership between COFCO International and leading global agricultural companies,” said a COFCO spokesperson. “They will ensure a stable and reliable supply of essential agricultural commodities to meet China’s growing demand.”
The deals come as China seeks to reduce its reliance on any single supplier for critical food imports, especially soybeans, where it heavily depends on Brazil and the United States. By diversifying its sourcing, China aims to mitigate risks associated with geopolitical tensions and weather-related disruptions. The agreements also provide Cargill and LDC with increased access to the Chinese market, a crucial component of their global growth strategies.