Oil for grain seals $5 billion Brazilian-Soviet trade deal
Soybean, grain, and oil have launched Brazil into a new set of trade agreements with the Soviet Union. The Brazilian minister of economic planning, Antonio Delfim Netto, along with a group of Brazilian businessmen, visited Moscow last month, where he signed a series of reciprocal trade agreements totaling over $5 billion for the next five years.
Starting immediately, the Soviet Union will supply Brazil with 20,000 barrels of Soviet crude oil per day, about 3 percent of Brazil's total oil imports, at a reported price of $35 a barrel, in exchange for a Brazilian pledge to sell annually in 1982 through 1986 a minimum of 500,000 tons of soybeans, 400,000 tons of soybean meal, and 40,000 tons of soybean oil at then- prevailing world market prices. The oil shipments will wipe out most of the accumulated Soviet trade deficit with Brazil, estimated at $300 million so far this year.
Brazil also agreed to furnish the Soviet Union an annual minimum of 500,000 tons of Brazilian corn from 1983 to 1986. All grain shipments are intended primarily for use as livestock feed.
The agreements provide for annual reviews to determine possible increases in shipments by both countries.
Mr. Delfim Netto said he considered the most important achievement of his mission to be the countries' mutual commitment to "future exchange of industrial products." A separate protocol to this effect was signed, and Brazil expects to ship significant quantities of textiles and shoes to the Soviets in the near future.
In accord with the USSR's history as one of Brazil's largest cocoa buyers, a new minimum-purchase agreement was signed guaranteeing annual shipments to the Soviet Union in 1982 through 1986 of 10,000 tons of cocoa and a like amount of cocoa liquor at New York-London prices.
Trade between the two countries is expected to surpass $900 million in 1981, or three times the average annual levels of 1976-80.
In another international direction, Brazil has announced that the Japanese foreign minister, Sunao Sonoda, and minister of international trade and industry , Rokusuke Tanaka, are to visit soon. The aim is to work out final details of Japanese minority participation with the Brazilian government in the $30 billion Amazon River Basin project. The project will exploit what is thought by many to be the world's largest concentration of iron ore, copper, manganese, and nickel. It will also tackle agricultural and forestry development.
Since this will require building an entire infrastructure, including roads, railroads, and ports, experts say the investment will greatly surpass the estimated $30 billion and will not be completed by 1985 as planned. When the project gets going, it will add an estimated $10 billion annually to Brazil's much-needed exports.