More here in time, once again, China executed purchases of commodities and food well above the norm, perhaps emboldened by the already underway Russian invasion of Ukraine. From then on, the market began to wonder if the country governed by the Chinese Communist Party was also preparing for a possible war with Taiwan, a region that it seeks to bring back under its command. Specifically, far from any speculation, China claims sovereignty over Taiwan and the Chinese military has significantly increased its activity in the region over the past two years.
Second, the role of the United States in this scenario is not neutral at all, quite the opposite.. The trigger for the Chinese threat on Taiwan was the visit of the Speaker of the US House of Representatives, Nancy Pelosi. That is why if this tension between two giants like China and the United States escalates, the market does not rule out a trade war between both nations and they cite as an example that what happened in the Trump era would have been, so to speak, light. Although there is still a long way to go, a possible blockade or sanction by China against the United States would have repercussions in a greater drop in the international prices of agricultural commodities, because the United States places the bulk of its production in that country.
Like light at the end of the tunnel, there is the possibility that China chooses to make larger purchases from Brazil, Argentina and Uruguay, other agro-industrial powers with which it has no political conflicts. Of course, each of these nations would also start from depressed international values, but for some products, beyond grains, there is still a long way to go.
According to analysts, in the same way that the fertilizer, food and energy market was greatly affected by Russia’s invasion of Ukraine, a possible advance by Beijing on Taiwan would generate impacts on the agro-industrial and manufacturing chain, from the shortage of manufactured components such as chips to the potential reconfiguration of food exports and imports.
Source: Ambito
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