The seemingly simple soybean has become a central player in a complex global dispute, spanning three continents and posing a severe threat to Brazil’s vast tropical savannas and forests.
At the heart of this issue is China’s enormous demand for soybeans, importing millions of tons annually primarily for cooking oil and animal feed.
Satisfying this demand has already led to significant environmental damage in Brazil, China’s primary supplier. This situation is poised to worsen as China drastically reduces its American soybean imports, providing a powerful incentive for Brazilian farmers to expand their cultivation into untouched natural areas.
Earlier this year, the government in Beijing retaliated against U.S. tariffs on Chinese goods by imposing substantial tariffs on American soybeans. Previously, the U.S. was China’s second-largest supplier, but now, American farmers haven’t sold a single bushel from their fall harvest to China. Hopes for a White House relief package are on hold due to the ongoing government shutdown.
Argentina, too, benefited, selling a large volume of soybeans to China after American farmers were sidelined. Its president, Javier Milei, even met with former President Trump recently.
However, Brazil stands to gain the most. Unsurprisingly, its influential agricultural lobby is actively campaigning to dismantle one of the most important industrywide measures, known as the Soy Moratorium, an agreement designed to curb deforestation in the Amazon, Brazil’s most renowned biome.
This creates a delicate situation for Brazilian President Luiz Inácio Lula da Silva, who is set to host the next round of international climate negotiations in Belém, within the Amazon rainforest, in November. His administration has publicly committed to controlling deforestation.
“The government finds itself in a very challenging position,” stated Cristiane Mazzetti, a forest campaigner with Greenpeace Brazil. “There is an active effort to undermine one of the most vital mechanisms for achieving zero deforestation.”
Soybeans represent Brazil’s largest agricultural export, with production experiencing a steady increase over decades. This growth dramatically accelerated in the last ten years, fueled by strained relations between Beijing and Washington, which prompted China to seek soybean sources beyond the American Midwest. By 2017, at the beginning of the first Trump presidency, Brazil had surpassed the United States as the world’s leading soybean producer.
A farmer plants soybeans near Sidrolândia in Mato Grosso do Sul State, central-west Brazil. (Photo: Eraldo Peres/Associated Press)
Soybeans imported from Brazil being processed at a facility in Shandong Province, China. (Photo: Agence France-Presse — Getty Images)
With U.S.-China relations now at a historic low, American farmers risk losing their largest global customer. For much of the past year, soybean prices have hovered around $10 a bushel, a notable drop from approximately $13 at the start of 2024.
“We’ve seen significant growth in recent years, triggered by the first U.S.-China trade war and now exacerbated by the second,” noted Lucas Costa Beber, vice president of Aprosoja, the Brazilian Association of Soybean Producers. “In the long term, if this situation persists, Brazil will see even greater opportunities.”
However, the outlook for Brazil’s natural environment is considerably less optimistic.
Typically, new soy plantations are established on land previously cleared for logging or cattle grazing.
Today, soybean fields span 40 million hectares, accounting for roughly 14 percent of Brazil’s agricultural land, according to MapBiomas, an independent satellite data group. The majority of this cultivation is concentrated in the Cerrado, a vast region of tropical savanna and forest corridors. While less globally famous than the Amazon, the Cerrado is a crucial Brazilian ecosystem.
The Cerrado is home to the headwaters of Brazil’s largest river basins and plays a critical role in regulating rainfall and temperatures. Although deforestation rates decreased last year due to stricter enforcement by President Lula’s administration, nearly half of the Cerrado’s native vegetation has already been lost to cattle ranching and soy farming.
“The Cerrado is vanishing,” warned Luciana Gatti, a climate change researcher at Brazil’s National Institute for Space Research. She emphasized that “the pressure to produce soybeans for export to China will intensify.”
In 2023 alone, over 460,000 hectares of recently deforested land in the Cerrado were used for soy harvesting, an area larger than Rhode Island, as tracked by Trase, a nonprofit monitoring deforestation in agricultural supply chains.
It’s important to note that the Cerrado is distinct from the Amazon. While soy-related deforestation hasn’t been entirely eliminated in the Amazon itself, independent researchers confirm it has been significantly curbed by the Soy Moratorium. This industry agreement, exclusively for the Amazon region, binds major commodity traders to avoid purchasing or financing soy grown on land deforested after 2008.
Consequently, in 2023, soy harvests in the Amazon originated from 150,000 hectares of recently deforested land—a considerably smaller area compared to the Cerrado, according to Trase figures.
Now, there’s growing pressure to suspend the Soy Moratorium in the Amazon. Last August, Brazil’s national antitrust regulator briefly lifted it to investigate alleged collusion among traders. However, a federal court swiftly reinstated the moratorium, leaving its long-term fate uncertain.
The soy producers’ association is at the forefront of the campaign against the moratorium. Mr. Beber, their vice president, labeled it a “trade barrier masquerading as environmental protection,” arguing that it unfairly favors other nations by imposing restrictions on Brazilian soybeans in the global market.
Mr. Beber suggested that farmers could substantially increase soy production by utilizing existing pasture lands in the Cerrado. “These regions are filled with degraded pastureland that could potentially be converted into cropland,” he stated. “It simply hinges on economic and market viability.”
Meanwhile, the market prospects for American soy farmers remain uncertain.
Soybeans are the leading U.S. agricultural export. The American Soybean Association has warned that domestic farmers risk losing China, their primary customer, which imported over $12.6 billion worth of soybeans last year, if the trade dispute persists. Furthermore, tariffs on Chinese goods have driven up the cost of fertilizer and equipment in the United States.
President Trump has demonstrated fluctuating intentions regarding a potential meeting with President Xi at a South Korean trade summit later this month. Should such a meeting occur, soybeans are expected to be a key item on the agenda.
Reporting for this article was also contributed by Flávia Milhorance and Claire Brown.