The booming cotton trade between Brazil and China could eventually be settled in China’s currency, the yuan, according to an official at the Brazilian Cotton Growers Association.
The move would be another blow to the dominance of the US dollar in global trade.
Marcelo Duarte Monteiro, who heads international relations at the cotton organisation, told China’s Global Times newspaper last week that yuan settlements were “a way to the future”.
[See more: Brazil’s ambassador to China hails the ‘strong partnership’ between the two nations]
Brazilian President Luiz Inácio Lula da Silva has been making calls for a trading currency that could be used by the BRICS bloc of countries (Brazil, Russia, India, China and South Africa). In March, China and Brazil reached a deal to trade in their own fiats, ditching the greenback.
Monteiro meanwhile suggested that the volume of Brazil’s cotton exports to China would overtake Sino-US trade in the commodity. Of the 382,000 tons of cotton imported by China in the first four months of 2023, US cotton accounted for just over half, at 52 percent, with Brazilian cotton making up nearly a third, or 31.5 percent.
China is Brazil’s largest trading partner and the number one market for key Brazilian exports such as soybeans and cotton.
