In a bid to bolster Japanese grain imports, Nippon Export and Investment Insurance (Nexi) has agreed to insure a loan agreement between SMBC, BNP Paribas and Brazilian agribusiness company Amaggi.

Nexi’s cover comes with a tenor of six years, and will insure the total financing amount of US$100mn, with Amaggi using the financing from the two banks for long-term working capital purposes.

The deal is expected to strengthen the import of certain commodities, such as soybeans and corns, which Nexi notes in a statement are “important grains” for Japan’s food security.

According to the Japanese export credit agency (ECA), Amaggi must export a “certain amount of grain to Japan during the agreement period, and make its best effort to export to Japan even in emergency situations”.

Nexi notes the deal feeds into the Japanese government’s broader food security strategy, which aims to create and maintain a “stable trading relationship with major food exporters” and minimise any impact of a state of emergency on food supply.

According to UN Comtrade data from 2019, maize (corn) was one of Japan’s top five imports from the South American country in terms of value, standing at just over US$992mn.

Soybean imports into Japan from the South American country stood at just under US$215mn for the year.