As expected, the relatively limited quota assigned by China to Brazil and Australia means that both countries are filling their quotas at a rapid pace.
In Australia’s case, 143 thousand tons entered China between January and April, equivalent to 70% of its 206 thousand-ton quota. During the SIAL fair in Shanghai last week, market participants indicated that by mid-May around 80% of the quota had already been utilized.
Brazil used 55% of its quota during the first four months of the year, with 613 thousand tons shipped. Although the pace remains fast, data from recent weeks suggest some moderation, which is now leading the market to believe that quota availability could last at least until shipments loaded in mid-July.
Argentina has used 35% of its 511 thousand-ton quota, while Uruguay and New Zealand remain in a much more comfortable position, with 19% and 18% utilization rates, respectively. This suggests that, as expected, both countries will be able to operate without urgency within the quota throughout the year and are very unlikely to fully utilize it. In both cases, exports would need to more than double the pace recorded in the first four months of the year in order to complete the quota.
Although Uruguay’s production is expected to increase during the second half of the year, shipments to China would need to rise from 15 thousand tons per month in January-April to 33 thousand tons per month for the remainder of the year.
