Understanding Shortage Allowances
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As harvesting of the 2024/25 soya bean bumper crop nears completion, Brazil hits new high production and export levels, with China importing record amounts amid trade tensions
2024/25 season outcome
Global soya bean trade
Over the past decade, Brazil has become the world’s leading soya bean producer and exporter, shipping around three-quarters of its exports to China. As China seeks to lessen its reliance on US grain supplies due to ongoing trade tensions, it is anticipated that the Asian country will import even larger volumes of the oilseed from Brazil, while sourcing smaller amounts from the United States and other regular suppliers, such as Argentina, Canada and Uruguay. Figure 1
Soya bean production outlook
Soya beans are expected to remain Brazil’s leading agricultural product and a cornerstone of the agribusiness sector and national economy for years to come, consistently contributing to a positive trade balance. The National Supply Company (CONAB) reports that the harvesting of the 2024/25 soya bean crop is 99.8% complete, with yields in nearly all major producing states exceeding initial estimates. The state of Mato Grosso do Sul (MS) faced challenges due to irregular rainfall, and Rio Grande do Sul (RS) again experienced significant harvest failures, this time due to dry spells that adversely affected the crop cycle.
In its latest assessment, CONAB has raised its estimates for this season’s soybean production to a record 169.7 Mmt, representing an impressive 14.8% increase compared to the previous season and an 8.9% rise over the record set during the 2022/23 season. The Central-West region, especially the leading grain state of Mato Grosso (MT), accounts for half of this season’s total output. Figure 2
Brazilian soya bean exports
The Brazilian federal agriculture agency anticipates that soya bean exports will reach a record high of 106 Mmt. Several factors have driven the country’s record production and exports: an expanded planted area (up by 3.2% from the last crop); improved in-field productivity (up 11.3%); favourable climate conditions across key producing regions; and steady demand from China.
Export revenues
About 52 Mmt of soya beans FOB valued at US$20 billion have been sold from January to May 2025, according to statistics from the federal government. This represents a 2.7% increase over the same period in 2024, keeping the oilseed as the top-grossing commodity in Brazil’s export basket so far this year.
Soya bean port handling
According to the National Agency of Waterway Transport (ANTAQ), about 40 Mmt of soya beans have been shipped until April 2025, representing a 2,4% increase compared to the same period last year. The top port complexes for these exports were Santos, handling 38% of the volumes shipped, followed by Paranaguá (14%), Itaqui (12%), Vila do Conde (Barcarena) (11%), Itacoatiara (7%), and São Francisco do Sul (5%). While the figures for May and June are not yet finalised, market analysts and trade associations anticipate they will be significantly higher than in 2024 on a year-on-year basis. Figure 3
Main destinations
Until May 2025, the leading destinations of the Brazilian soya bean shipments were China (74%), Spain (4.1%), Turkey (2.4%), Thailand (2.4%) and Iran (2.2%).
2025/26 season overview
Although CONAB has not yet conducted its first crop assessment for the 2025/26 soya bean season, various sources are forecasting production and export levels that could exceed current figures. The United States Department of Agriculture (USDA) anticipates Brazil will achieve an impressive output of 175 Mmt, which would account for about 41% of the entire world’s soybean production. In comparison, the United States is projected to produce 118 Mmt, and Argentina is expected to reach 48.5 Mmt. Figure 4
The USDA projects that Brazilian soya bean exports for the upcoming season will rise to around 112 Mmt, 7.2% higher than the 2024/25 season. This would account for 59% of global soya bean shipments, significantly surpassing estimates for the United States (49.4 Mmt), Paraguay (7.7 Mm/t), and Canada (4.8 Mmt).
Brazil is the world’s third-largest oilseed crusher. According to the US agricultural agency, oilseed crushing and soya bean meal exports have consistently increased over the years, reaching successive record levels. On average, half of the soya bean meal produced in Brazil is shipped abroad. Figure 5
Soya China initiative
China remains the world’s largest buyer of soya beans, with imports expected to increase from 108 Mmt in the 2024/25 season to a record 112 Mmt in the next cycle, according to the latest USDA estimates. In recent years, Brazil has been the primary supplier of this versatile oilseed to China, which imports nearly 75% of the Brazilian soya bean shipments, chiefly for animal feed. Figure 6
The agricultural trade ties between Brazil and China have the potential to strengthen further. The two countries are in early stages of discussions to develop a dedicated soya bean supply chain that meets China’s latest sustainability and quality requirements, dubbed the “Soja China” (“Soya China” in Portuguese).
This proposed initiative builds on the successful certification model established for Brazilian beef exports to the Chinese market, called “Boi China” (“China Beef”). It is specifically designed to meet Chinese standards concerning environmental, social, and traceability criteria, which are similar to, but seemingly less stringent than, the requirements currently enforced under the EU Deforestation Regulation (EUDR). If approved, the Soya China initiative could boost Brazil’s share of soya bean shipments to the Asian country, potentially challenging major competitors, especially the United States, whose primary export to China is also soya beans.
Details of the initiative have not yet been released. It is uncertain how the proposed new standards would impact the global oilseeds prices, competition, and market dynamics among major suppliers, as well as how they would address concerns that a surge in demand for Brazilian soya beans from China could lead to increased deforestation and carbon emissions in Brazil. Furthermore, it remains unclear whether Brazilian farmers will be able to meet the new production and certification standards while managing the expected rise in demand.
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