A seemingly simple bean — the soybean — is at the heart of a complex geopolitical struggle stretching across three continents. This struggle now poses a serious threat to the Cerrado, Brazil’s vast tropical savanna, which is the largest of its kind globally.
China’s insatiable demand for millions of tons of soybeans annually, primarily for cooking oil and livestock feed, is a major driver in this conflict.
Meeting this massive demand has already inflicted significant damage on Brazil’s forests and grasslands, as the country is China’s largest soybean supplier. The situation is expected to escalate in the coming months, as China has largely ceased purchasing American soybeans, creating a powerful incentive for Brazilian farmers to convert even more land into soy farms.
This year, Beijing imposed substantial tariffs on American soybeans, a direct response to similar U.S. tariffs on Chinese products. Previously, the U.S. was China’s second-largest supplier. However, American farmers haven’t sold any of their latest harvest to China, and any hope for government relief has been sidelined by a recent government shutdown.
Argentina, too, has benefited from this shift; its president, Javier Milei, recently met with President Trump. Following the exclusion of American farmers, Argentina exported a huge quantity of soybeans to China this year.
Yet, Brazil, the world’s largest soybean exporter, stands to gain the most. Unsurprisingly, its influential agricultural lobby is actively campaigning to dismantle the ‘Soy Moratorium,’ a crucial industry agreement designed to curb deforestation in the Amazon, Brazil’s most renowned biome.
This development puts Brazilian President Luiz Inácio Lula da Silva in an awkward position. He is slated to host the upcoming international climate negotiations in November in Belém, a city within the Amazon rainforest, and his administration has publicly committed to reining in deforestation.
“The government is in a deeply challenging situation,” stated Cristiane Mazzetti, a forest campaigner for Greenpeace Brazil. “We are witnessing an assault on one of our most vital tools for achieving zero deforestation.”
Soybeans constitute Brazil’s largest agricultural export. While soy production has consistently grown for decades, it surged dramatically over the last ten years. This acceleration coincided with deteriorating U.S.-China relations, prompting China to seek soybean sources beyond the American Midwest. By the time Donald Trump’s first term began in 2017, Brazil had already surpassed the United States as the world’s foremost soybean producer.
Today, as U.S.-China relations hit new depths, American farmers face the real possibility of losing their most significant international customer. Soybean prices have hovered around $10 a bushel for the better part of the past year, a notable drop from approximately $13 at the beginning of 2024.
“We’ve experienced substantial growth in recent years, initially spurred by the first U.S.-China trade war, and now again by the second,” commented Lucas Costa Beber, vice president of Aprosoja, the Brazilian Association of Soybean Producers. He added, “In the long term, if this dynamic persists, Brazil’s opportunities will undoubtedly expand.”
However, the outlook for Brazil’s natural environment is considerably less optimistic.
Historically, new soy plantations are established on land that has already been deforested and cleared previously for cattle grazing.
Currently, soy cultivation spans 40 million hectares—roughly 14 percent of Brazil’s total agricultural land, as reported by MapBiomas, an independent group utilizing satellite data. The majority of this expansion occurs within the Cerrado, an expansive tropical savanna and forest ecosystem. While not as globally recognized as the Amazon, the Cerrado is a critically important biome for Brazil.
This region serves as the source for Brazil’s largest river basins and plays a crucial role in regulating regional rainfall and temperatures. Although deforestation has seen a recent decline due to stricter enforcement by the Lula administration, nearly half of the Cerrado’s original vegetation has already been lost, primarily to cattle ranches and soy farms.
“The Cerrado is steadily vanishing,” warned Luciana Gatti, a climate change researcher at Brazil’s National Institute for Space Research. She emphasized that “the pressure to ramp up soybean production for export to China will only intensify.”
In 2023 alone, over 460,000 hectares of land in the Cerrado that had been recently deforested were used for soy cultivation, according to Trase, a non-profit organization monitoring deforestation in agricultural supply chains. This area is larger than the state of Rhode Island.
It’s important to note that the Cerrado is distinct from the Amazon rainforest. While soy-linked deforestation in the Amazon hasn’t been completely eliminated, independent researchers confirm it has been considerably curtailed by the Soy Moratorium. This industry agreement, exclusively for the Amazon region, commits major commodity traders to avoid purchasing or financing soy from lands cleared after 2008.
Consequently, in 2023, soy harvests in the Amazon originated from 150,000 hectares of recently deforested land, a significantly smaller footprint compared to the Cerrado, as per Trase’s data.
However, the Soy Moratorium in the Amazon is now under increasing pressure for suspension. In August, Brazil’s national antitrust regulator temporarily halted it to investigate claims of collusion among traders. While a federal court promptly reinstated the moratorium, its long-term viability is still in question.
The soy producers’ association is spearheading the opposition to the moratorium. Mr. Beber, their vice president, criticized it as a “trade barrier masquerading as environmental protection.” He argued that the moratorium inadvertently benefits other nations by imposing restrictions on which Brazilian soybeans are eligible for global trade.
Mr. Beber suggested that farmers could significantly increase soy production by utilizing existing degraded pasturelands in the Cerrado. He emphasized, “All these areas possess degraded pastureland with the clear potential to be transformed into cropland. Ultimately, it boils down to economic and market feasibility.”
Meanwhile, the market outlook for American soy farmers remains unclear.
Soybeans represent the leading U.S. agricultural export. The American Soybean Association warns that U.S. farmers risk losing China, their primary customer that accounted for over $12.6 billion last year, if the trade dispute persists. Compounding this, tariffs on Chinese goods have driven up the prices of essential agricultural inputs like fertilizer and equipment in the United States.
Former President Trump has shown inconsistency regarding his potential meeting with President Xi Jinping at a trade summit in South Korea later this month. Should the meeting occur, soybeans will undoubtedly be a central topic of discussion.
Flávia Milhorance and Claire Brown contributed to this report.