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The past decade has seen Latin America, particularly Brazil, solidify its status as the backbone of the global soybean industry, marked by rapid production growth and extensive market penetration in key international markets. As Brazil’s output soared, it not only outpaced US farmers but also emerged as the leading supplier to Chinese processors, a shift that has reshaped trade dynamics.
Now, with escalating tensions and the potential for a renewed US–China trade war on the horizon, South America stands at a strategic crossroads. The region’s soybean exporters, particularly Brazil, Argentina, and Paraguay, are uniquely positioned to respond to volatility between Washington and Beijing. Should tariffs or export restrictions resurface, APAC importers, led by China, are likely to intensify their reliance on Latin American supply chains, thereby deepening the region’s influence and responsibilities within global agricultural trade.
This article explores how South America can capitalize on opportunities and mitigate risks in this rapidly evolving landscape. It explores potential scenarios arising from a “Trade War 2.0,” including shifts in trade flows, pricing volatility, logistical challenges, and strategic alliances between Latin America and APAC nations. By analyzing these potential outcomes, the article provides insights into how South American producers and global buyers can navigate the uncertainty of renewed geopolitical tensions.
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Between 2020 and 2022, the soybean market experienced a period of exceptional profitability. High global demand, tight soybean stocks, and favorable pricing created a surge in margins that incentivized producers across South America to aggressively expand their soybean farms. According to the Brazilian Company of Supply (CONAB), at the peak in 2021, Brazilian farmers experienced profitability levels that were three times the historical average, generating a surge in investments in Brazilian fields.
This surge was evident in the expansion of more than ten million hectares from 2021 to the last season, increasing from nearly 37 million hectares to 47.3 million hectares, according to CONAB. Argentina and Paraguay also saw growth in soybean acreage, albeit at a more measured pace. Argentina expanded from 15.87 to 17.1 million hectares, while Paraguay increased from 3.5 to 3.95 million hectares over the same period.
Production figures reflected the area’s expansion. Brazil’s output rose from 139 million tons in 2020/21 to a record-breaking 169 million tons in 2025. Argentina maintained relatively stable production levels, while Paraguay saw modest growth. Overall, South America’s total soybean production reached 230 million tons in 2024/25, up from 193 million tons in 2020/21.