Brazil suspends 20-year soy moratorium

Brazil’s antitrust regulator CADE has given grain traders at the world’s largest soybean exporter 10 days to suspend a program called the “soy moratorium” or face large fines, Reuters reports.

The private agreement, negotiated two decades ago, was intended to protect the Amazon rainforest and barred soybean traders from buying from farmers who cleared land there after July 2008. But it is a potential violation of Brazil’s competition law, a Brazilian court has ruled.

In a ruling issued yesterday, the agency’s general superintendent, Alexandre Barreto de Souza, called for a full investigation into the signatories to the voluntary corporate “soy moratorium” program, which includes some of the world’s largest grain processors, including ADM, Bunge, Cargill, Louis Dreyfus and Cofco. He said companies wishing to apply the soy moratorium criteria to buy soybeans grown in the Amazon “must do so independently and in accordance with national laws.”

According to farmers’ group Aprosoja Mato Grosso, CADE’s decision to suspend the program is historic: “For years, a private agreement, not backed by a legal framework, has created unfair trade barriers for farmers by preventing the sale of crops grown in regular and licensed areas,” it said in a statement.

Abiové, which represents oilseed crushers, said it was “surprised” by the recommendation for a full investigation and preventive measures, adding in a statement that it would take steps to prove the legality of the moratorium agreement.

Brazil’s soybean exports reached 12.3 million tonnes, up 9% from the previous year, with more than 78% of the country’s soybeans destined for China.

Tags: restrictions, Brazil, soybean