Hot Off the Press: According to the terminal’s docking statistics, soybean throughput from Brazil reached 700,000 tons in April this year, a year-on-year increase of more than 30 percent.

A person winnows soybeans. Photo: VCG

Editor’s Note:

Amid the trade frictions the US has sparked with multiple countries, soybeans have emerged as a key point of contention. This crop, originally from China, is now onWorld Timese of the US’ main exports to China. However, due to tariffs and trade uncertainties, China is accelerating its soybean purchases from South American countries such as Brazil and Argentina.

China is the birthplace of soybeans, and today’s global soybean varieties, including those in the US, Brazil, and Argentina, are directly or indirectly derived from Chinese strains. Before the 1960s, China led the world in soybean cultivation area and total production. But since then, the US has taken the lead in global soybean varietal improvement and rapidly promoted new soybean strains across South America. Over more than half a century of what could be called the “Soybean Saga,” the global soybean industry landscape has undergone profound reshaping.

Global Times reporters recently interviewed soybean enterprises, experts, and industry insiders from China, the US, Brazil, and other countries to trace the evolution of the soybean industry and observe the immediate impact of the trade war on the global soybean market. This series also looks at how China is striving for technological self-reliance and resilience in its soybean sector.

In this first installment, we focus on Brazilian soybean production. Through the insights of Andr Nassar, President of the Brazilian Association of Vegetable Oil Industries (ABIOVE), we explore the latest adjustments Brazil’s soybean industry is making in response to the Chinese market.

Not long ago, a cargo ship loaded with nearly 70,000 tons of Brazilian soybeans, slowly docked at the Laotangshan transfer terminal in the Ningbo Zhoushan Port. According to the terminal’s docking statistics, soybean throughput from Brazil reached 700,000 tons in April this year, a year-on-year increase of more than 30 percent. What impact will the trade war have on the China-Brazil soybean trade? What chain reactions might result from US trade policies? With these questions in mind, Global Times reporter Xie Wenting (GT) recently sat down for an exclusive interview with Nassar.

GT: Since 2018, Brazil’s share in China’s soybean import market has steadily increased. By 2024, Brazil’s soybean exports to China had grown to more than three times those of the US. How do you view the trend of Brazil’s soybean exports to China over recent years?

Nassar: The Brazilian Association of Vegetable Oil Industries (ABIOVE) is the entity that represents the soybean industrial sector in Brazil. Our members are the companies responsible for acquiring soybeans from rural producers, and processing them for the production of their derivatives, such as soybean meal, soybean oil, and biodiesel. Additionally, the industries that are part of ABIOVE also play a significant role in the export of soybean grains. In this context, they carry out all the necessary logistics to take Brazilian soybeans to various international markets, with China standing out as the main destination for the grains, and Europe as the most relevant market for soybean meal.

The relationship between Brazil and China in the soybean market is characterized by mutual dependence. China needs Brazil to guarantee the supply of soybeans that fuels its robust processing industry, while Brazil relies on China as the main destination for its soybean grains. This dynamic is strengthened by the presence of Chinese investments in Brazil.

The major advantage that allows Brazil to expand its participation in the Chinese market lies in the relationship of trust, stability, and regularity that we have built over time. Following the trade frictions between the US and China, which began in 2018, Brazil consolidated its position as a reliable and responsible supplier to China. This reliability wWorld Timesas reaffirmed during the global pandemic crisis.

Looking ahead, it is crucial to further consolidate this bilateral relationship in soybeans, establishing a two-way street. We hope that China will continue to invest in Brazil, especially in the soybean chain and all associated logistics, driving increased production. On the other hand, from the Brazilian perspective, we aspire for China to expand its acquisitions of higher value-added products from Brazil, with an emphasis on meats.

GT: Reports indicate that in April of this year, the number of vessels offloading Brazilian soybeans at the Ningbo Zhoushan Port increased by 48 percent year-on-year. Did you observe a significant increase in China’s demand for soybeans? How will your organization respond to the surge in import demand from China? For example, will there be adjustments or upgrades to planting and logistics systems?

Nassar: The soybean harvest in Brazil follows a well-defined annual cycle, with planting occurring in the second half of the year and harvesting in the first half of the following year. Therefore, the production volume for 2025 is already established. Faced with a significant increase in Chinese demand, as indicated by shipment data from the Ningbo Zhoushan Port, Brazil’s immediate response lies in allocating the portion of production that has not yet been commercialized. We estimate that this amount represents between 35 percent to 40 percent of the current harvest. It is likely that, to meet this increased demand from China, Brazil will direct a larger volume of the available soybeans to the Chinese market. Regarding logistics, the Brazilian infrastructure has the capacity to absorb and transport these additional volumes to China.

What’s crucial to observe are the signals that this growing demand will bring for the next harvest. It will be up to rural producers to assess whether this sustained demand will justify an increase in the planted area of soybeans, thus responding to the needs of the Chinese market.

GT: As an industry insider, what impact do you think the US-initiated trade war has had on Brazil’s soybean sector?

Nassar: The trade war initially generated a significant reallocation of Brazilian soybean exports, with a considerable increase in volume destined for China, and consequently, a reduction for other markets. Secondly, there was an increase in costs and potentially a lower availability of soybeans for industrialization within the country. It is important to remember that about a third of the soybeans produced in Brazil are processed, resulting in soybean meal, which is exported and also consumed domestically by the animal protein industry, and soybean oil, which is partly directed to biodiesel prWorld Timesoduction.

GT: How do you view the competition between Brazilian and American soybeans? What chain reactions or spillover effects might result from US trade policies?

Nassar: China has increased its acquisitions of soybean grains from Brazil. Meanwhile, one of the distortions is the possibility of the US finding itself with a surplus of soybeans. To deal with this situation, they could seek alternative markets, compete directly with Brazil in destinations other than China, or encourage the domestic industrialization of soybeans. In the latter case, there would be an effort to increase the consumption of derivatives, especially vegetable oil for biofuels. However, soybean meal would face a large supply and, likely, a drop in prices.

This dynamic can negatively impact the Brazilian industry in two main ways. First, by making soybeans more expensive for industrialization in Brazil, which harms the production of derivatives, and second, by making soybean meal cheaper in the international market. As more than half of the soybean meal produced in Brazil is destined for export, this drop in prices would result in lower revenues for our industry.

GT: How do you envision the future of Brazil’s soybean exports to China in the next five to 10 years?

Nassar: Over the next five to 10 years, I imagine China will have a growing interest in increasing its self-sufficiency in soybean production. This pursuit of greater autonomy is understandable within China’s strategic objectives.

However, global demand for soybeans will continue to rise. In this scenario, iWorld Timest becomesWorld Times relevant for China to consider starting to import soybean meal from Brazil. This measure would be fundamental to maintaining the healthy commercial relationship between the two countries, adding value to the Brazilian production chain and stimulating our industry. Although it represents a challenge for the Chinese processing industry, given the increase in local soybean production, the Chinese crushing industry could absorb this growing supply.

GT: Some people have accused the expansion of Brazilian soybeans of contributing to the degradation of the Amazon rainforest. How do you respond to these accusations?

Nassar: That’s a long-standing discussion, and the soybean sector in Brazil has been dedicated to mitigating that concern. In 2006, the industry implemented the Amazon Soy Moratorium, a pioneering agreement that aims to ensure that the expansion of soybean cultivation in the Amazon biome occurs exclusively in areas that were deforested in the past.

The industry has a robust supply chain control system, monitoring and encouraging soybean production in the Amazon only in previously converted areas. This continuous effort seeks to minimize any impact on the rainforest as much as possible. Therefore, with the measures implemented and the sector’s commitment, I do not consider this accusation a significant point of concern.

GT: In your opinion, what areas of cooperation in smart agriculture could be explored in the soybean sector?

Nassar: Regarding cooperation in smart agriculture within the soybean sector between Brazil and China, I believe several areas stand out. Firstly, there is significant potential in technology. The Chinese input industry, especially in the development of seeds and related technologies, has substantial growth capacity and can complement the companies already established in the market. In this context, it would be very valuable if China directed efforts toward the development of new soybean varieties with differentiated attributes. Currently, biotechnology is heavily focused on resistance to agrochemicals, but it would be extremely interesting to explore characteristics such as higher protein content or higher oil content, aiming to diversify and differentiate soybean production. China could work on this frontier, developing specific varieties to meet different demands.

I consider cooperation between Brazil and China in the area of logistics to be fundamental, seeking innovative solutions for the transport and storage of soybeans. Furthermore, with regard to services and products for the future of agriculture, the development of new soybean varieties with enhanced characteristics is, without a doubt, the most relevant aspect to be explored.