Key Points
- Brazilian soybean farmers are increasing production to meet a surge in demand from China.
- China has almost completely stopped buying U.S. soybeans due to the ongoing trade war.
- In September, China imported zero soybeans from the U.S. for the first time since 2018. Brazil is now China’s primary supplier, and its exports are soaring.
- The situation is a major boon for Brazilian farmers but is causing “pain” for their American counterparts.
Brazilian soybean farmers are gearing up for a boom. With the ongoing trade war between the U.S. and China effectively shutting American farmers out of the massive Chinese market, Brazilian producers are stepping in to fill the void. “The U.S.-China trade war opens an opportunity for us here,” said Andrey Rodrigues, a farmer in São Paulo state.
China is the world’s largest soybean buyer, and it has almost completely stopped buying from the U.S. In September, for the first time since 2018, China did not import any soybeans from the United States. Instead, it has turned to Brazil, its new primary supplier.
The numbers tell the story. In the first eight months of this year, China imported 77 million metric tons of soybeans from Brazil, compared to just 17 million from the U.S. And with the American harvest now underway, there’s no sign of Chinese buyers returning.
Local trading companies in Brazil are telling farmers they will buy all the soybeans they can get. In response, farmers like Rodrigues are ramping up their production, planting more acres to meet the surging demand. Brazil’s government is now expecting its next soybean harvest to rise by 3.6% to a new record.
While some analysts see this as a short-term move by China to retaliate against the U.S., Brazilian farmers are seizing the opportunity for now. “We need to be very aware in moments like this,” Rodrigues said. “Try to sell futures for the next harvest, seize this chance now.”
