The oilseed is by far the most important crop cultivated in Brazil, accounting for more than one third of the national agricultural production value in 2018. In just under a decade, the area planted with soybean in the Latin American country increased by over 50 percent, recently reaching more than 35 million hectares. Production has been highest in the Central-West region. Nevertheless, the expansion in Brazilian soybean production comes with increasing environmental concerns, as the ever-growing need for arable land leads to deforestation, especially in the Amazon region.
In addition to its leading position in production, Brazil also ranks as the largest exporter of soybean worldwide. China is by far the most important country of destination for Brazilian soybean exports, accounting for nearly 80 percent of the country’s export value in 2019. Exports of soybean from Brazil to China reached record highs in 2018, as trade wars between the Asian country and the United States intensified, leading the Trump administration to impose a tariff on soybean exports that year. The higher cost of U.S. soybeans caused the Chinese market to raise its imports from Brazil.
Along with the foreign market, a rising domestic consumption has also contributed to the growth in soybean cultivation in Brazil. The Brazilian industrial sector's consumption of soybean oil has consistently increased in the past decade, mainly a result of its use as the main feedstock for biodiesel production. With the mandated biodiesel blend rate for commercialized diesel fuel in Brazil being raised to 12 percent in 2020, the increasing demand for soybean oil in the Brazilian fuel sector can be expected to continue.
