Quote from chief_editor on September 29, 2023, 10:25 am

In the intricate world of international trade between China and Brazil, a myriad of challenges awaits traders, especially when importing commodities like soybeans and sugar. One Chinese trader recently shared a cautionary tale that sheds light on these obstacles and provides insights for those looking to navigate this lucrative but complex market.

Last week, we came across a case where a company, not based in Brazil, claimed they could supply a significant amount of non-GMO soybeans from Brazil. They provided the name and Chinese customs registration number of a Brazilian supplier. To prove their authenticity, they presented trade records showing the Brazilian company exporting non-GMO soybeans to China. On the surface, nothing seemed amiss. Our company has an office in Brazil, and we maintain contact with many Brazilian exporters under our domestic subsidiary's name. Using the name of the Brazilian supplier from the trade records, we reached out to the company and spoke directly with their manager. The manager confirmed that while they are licensed to export to China, they have never exported a single grain of food to the country. This proved the trade record to be fake.

Paraná state in Brazil is a major soybean export hub. A business representative from the state informed me that the quantity of non-GMO soybeans in Brazil is extremely low, making exports almost impossible. Crucially, the equipment used at the ports for loading is dedicated to genetically modified soybeans. It's not permitted to be used for non-GMO soybeans because their compositions differ and absolutely cannot mix. If there were exports of non-GMO soybeans, they would require changing out the port's equipment, which is not feasible.

The number of scams in international trade, where bait is switched, is increasingly common. Fraudsters randomly pick a lesser-known Brazilian exporter registered with Chinese customs, presenting fake trade records to defraud companies. It's challenging for domestic companies to discern genuine from fake.

They mainly exploit three weaknesses:

1. Non-GMO soybeans and sugar are in high demand, attracting numerous buyers, making it easy to ensnare a significant player.
2. Most domestic buyers can't personally supervise the loading of goods at Brazilian ports, providing fraudsters an opportunity to use fake bills of lading to secure letters of credit.
3. The most significant vulnerability is the unfamiliarity of domestic buyers with Brazilian suppliers. They have no way to contact them, making it hard to verify document authenticity.

The competition among domestic and international trading companies is fierce. Many fraudulent listings are lurking on domestic information websites. If businesses solely rely on these platforms or recommendations about available stock, they risk falling into these scams. Just in August, a Chinese company was defrauded of over 2 million RMB, a bitter lesson.

Brazil is resource-rich, offering numerous products suitable for the Chinese market. Every day, we receive inquiries from China about soybeans, corn, sugar, meat products, timber, ore, and more.

Based on my experiences, I have some advice for businesses considering food and sugar imports from Brazil:

1. If discussing purchase with a company claiming to have Brazilian sources, first verify if their supplier is registered with Chinese customs. Ensure payments are directly made to this registered company. Be wary if a third party or a company from another country is involved in the transaction.
2. For those committed to international trade, it's best to register a company in Brazil and deal directly with Brazilian suppliers. This avoids pitfalls and connects with genuine buyers. For instance, if you're purchasing IC45 sugar, contacting the 24 Brazilian sugar exporters registered with Chinese customs would simplify the process.

When initiating contact with Brazilian suppliers, they often ask for our Brazilian company's details and the contact person's name. Only after verifying these details do they proceed with discussions. It's also better to use an official business email for communication. Informal email addresses like QQ or 126 are not taken seriously.

Considering the plethora of resources Brazil can export to China, having a Brazilian company as a liaison benefits long-term international businesses. The cost of registering a Brazilian company is trivial in the grand scheme, and it might even lead to obtaining Brazilian residency, facilitating easier travel and numerous business advantages.

There are agencies in China that assist with registering companies in Brazil. I've helped some companies set up there and can offer insights and advice to avoid pitfalls.

I hope businesses dedicated to international trade can avoid misleading information and thrive in an authentic business environment.