The importance of soybeans in the Brazilian economy, within Mercosur, and in the global market.

Soybean plantation

Originally from China, soybeans (Glycine max (L) Merrill) are cultivated in Brazil for grain production, playing a crucial role in the Brazilian economy. The tropical climate, being below the equator, favors the development of the plant from germination to flowering and harvest, earning Brazil the title of the country that 'tropicalized soybeans.' According to Embrapa (the Brazilian Agricultural Research Corporation), Brazil is the country with the greatest potential for cultivated area.

Furthermore, according to the institution, the Brazilian soybean agribusiness complex surpasses ten billion dollars in export revenues to other countries, which corresponds to approximately 8% of all the country's exports.

Moreover, Mercosur has been a strategic facilitator for soybean trade among its member countries and has achieved 56% of the global soybean supply. Recently, events such as tariffs imposed by the United States and China have heightened the relevance of Brazilian soybeans in the global market, bringing both opportunities and challenges. How did a single grain transform a nation's economy and become a key player in the global market?

Soybeans in the Brazilian economy

Brazil is the world's largest producer of soybeans, accounting for about 37% of global production. Soybean cultivation represents approximately 11% of the Brazilian agricultural Gross Domestic Product (GDP) and generates thousands of direct and indirect jobs, whether in planting, harvesting, accounting, general services, or transportation, providing income and livelihood for many families.

Furthermore, soybean exports contributed more than 40 billion dollars to the trade balance in 2024, consolidating their position as one of the main economic pillars of the country. With its vast territory and favorable climate, many rural producers, small, medium, and large, see soybean cultivation as a way to achieve economic prosperity given the demand for soybeans in the market for various applications. On Brazil's stock exchange, B3, the main companies that produce and trade soybeans are:

• Agrogalaxy S.A.: With its shares traded on the stock exchange under the ticker AGXY3, the company is involved, among other activities, in the commercialization and export of soybeans.

• Boa Safra Sementes S.A.: The company trades its shares on the stock exchange under the ticker SOJA3 and stands out in soybean cultivation, having launched its own premium brand, Avra Sementes, through innovation and quality

• BrasilAgro S.A.: The company and its subsidiaries operate several farms, with a total area of 266,249 hectares, and cultivate various crops, including soybeans. The company trades its shares under the ticker AGRO3.

• Humberg AgriBrasil Comércio e exportação de grãos S.A.: The company trades agricultural commodities, including soybeans, and its ticker is GRAO3.

• SLC Agrícola S.A.: With its activities directly related to agriculture, soybeans are a key asset representing a significant share of its results, and its trading ticker is SLCE3.

• Três Tentos Agroindustrial S.A.: The company processes and exports soybeans, as well as other grains. Its trading ticker is TTEN3.

The IBGE - Brazilian Institute of Geography and Statistics estimates that soybean production in 2025 is expected to break records, as it recorded a 13.4% increase compared to the previous year's harvest. Corroborating, Abiove - Brazilian Association of Vegetable Oil Industries, projects a production of 168.7 tons and forecasts a record total of 104.4 million soybean exports for the year 2025, further estimating revenues close to US$ 50.8 billion

Impact of soybeans on Mercosur

The economic integration provided by Mercosur has been fundamental in strengthening the soybean market within Mercosur. The tariff agreements between Brazil, Argentina, Paraguay, and Uruguay facilitate the transportation and export of the product to external markets. Below are the countries in the bloc with their respective soybean productions based on recent data:

Country	Soybean Production (2024/2025)	Observations
Brazil	170 Million tons	World's largest producer, with 47 million hectares cultivated
Argentina	52.6 Million tons	Increase of 4.3% in production due to area expansion and favorable exchange rates
Paraguay	10 Million tons	Stable production, with a focus on exports to regional markets
Uruguay	2 Million tons	Smaller production, but with high quality and exports to premium markets

These figures highlight the significance of Mercosur as one of the leading soybean exporting blocs in the world. In 2024, Mercosur accounted for 67% of global soybean exports.

Moreover, the partnership between Mercosur and other economic blocs becomes essential in amplifying the reach of Brazilian soybeans, making them a valuable resource in the international market. The Mercosur - European Union Agreement opens doors not only for Brazil but for all its member countries. The agreement establishes a Free Trade Zone between the two blocs, focusing on the removal and reduction of import and export tariffs.

The negotiations are concluded, but the text still needs to go through review, be voted on by the 27 Heads of State of the European Council and 720 votes in the European Parliament, while for Mercosur it needs to be ratified by the Congress of the four member countries (Argentina, Brazil, Paraguay, and Uruguay). For Mercosur, the impact would be on the agricultural trade, with an estimated GDP increase of 11.4 billion euros (R$72.6 billion). As a result, Brazilian soybeans would expand their market and further stimulate domestic production, while the soybean market in Mercosur as a whole would experience significant appreciation and opening, boosting production.

The US-China Trade War and the Expansion of the Soybean Market for Brazil

The United States of America is the largest exporter of soybeans to China, with more than 27 million tons exported there. However, the tariffs imposed by the Donald Trump administration tend to change this scenario, as China's response was to increase taxes on agricultural commodities, which raised the cost of importing soybeans for Chinese importers themselves.

As a result, Brazil, which was previously seen as an alternative soybean supplier, becomes a major beneficiary, as China starts seeking to import Brazilian soybeans. The escalation of tariffs caused Brazilian soybeans to appreciate, and the price of a 60kg bag rose to US$ 21, representing a 10% increase. Although the current scenario presents opportunities in the sector, experts advise caution, according to Sergio Mendes (General Director of the Brazilian Association of Cereal Exporters) in response to Agro Estadão:

At first, it may seem that the measures will have a great impact on the Brazilian economy, as China will further establish itself as a strategic trading partner for South America. However, we will only be certain of the situation as time goes on.

Currently, Brazilian soybeans have appreciated, and one can speculate gains and optimism both for the current harvest and projections for the next year, 2026. However, caution is essential as these tariffs are undefined, and it is uncertain how long they will remain in the market in their current form due to their fluctuations.

It was announced on Monday, April 28, 2025, by the National Development and Reform Commission of China, through its deputy director Zhao Chenxin, that grains produced by the United States can be easily replaced, and thus Brazil occupies a significant position as an exporter to the Asian country. It is estimated that 700 thousand tons of Brazilian soybeans were exported in April, representing a 32% increase compared to last month, and, considering the same period in 2024, a 7% increase in soybean exports to China.

Soybean Byproducts and Sustainability

Soybean byproducts, such as oil, biodiesel, and soybean meal, represent an additional opportunity to diversify the Brazilian economy. For 2025, according to Daniel Furlan Amaral - Abiove:

Brazil will export more soybeans to China and more soybean meal to its main customers in Europe, the Middle East, and Southeast Asia, amid the trade war between the United States and China.

Meanwhile, more sustainable agricultural practices are being adopted to minimize environmental impacts, ensuring that soybean production in Brazil is more aligned with global climate commitments. The country will host COP30 and have a great opportunity to position itself as a reference in sustainable and certified soybean production.

Conclusion

Soybeans have established themselves as one of the fundamental pillars of the Brazilian economy, highlighting their importance both in the domestic market and in the international arena. Brazil not only utilizes its natural and technological resources to meet growing demand but also finds new opportunities for expansion due to external factors, such as the US-China trade war.

Despite the progress and opportunities, the future of the sector requires attention to sustainability and market diversification, avoiding risks of excessive dependence on a single partner, such as China. By adopting agricultural practices that are more aligned with global demands for environmental responsibility and innovation, Brazil can solidify its position as a global reference in sustainable soybean production. Thus, the country not only reaps economic benefits but also assumes a leadership role in the commitment to sustainable development.

References

B3 - Brazil, Stock Exchange, Over-the-Counter Market. Listed companies. Available at: https://www.b3.com.br/pt_br/produtos-e-servicos/negociacao/renda-variavel/empresas-listadas.htm. Accessed on: 25 Apr. 2025.