South America’s agricultural sector enters a phase of structural transformation amid record exports and deeper integration with the EU

The region is strengthening its position as a global hub for agri-innovation, sustainable supply chains, and climate-oriented trade ahead of 2026.

The past year became record-breaking for South America’s agricultural sector across multiple areas and laid the foundation for even larger-scale changes in 2026.

Brazil strengthens export leadership and trade integration

As a key example, Brazil’s agricultural exports reached USD 169.2 billion in 2025, up 3% year-on-year, according to the country’s Ministry of Agriculture and Livestock.

At the beginning of 2026, Brazil and several Latin American countries signed a major trade agreement with the European Union. The EU-MERCOSUR agreement, negotiated for more than 25 years, creates a free trade area covering over 700 million people and around 20% of global GDP.

The agreement not only reduces trade barriers but also positions the region as a global center for product traceability, sustainability, and supply chain innovation amid tightening EU climate policies.

Rising sustainability requirements and technological transition

As new regulatory requirements are introduced, the region faces two key challenges: meeting growing global demand while ensuring strict compliance with environmental and climate standards.

Particular importance is attached to the EU Deforestation Regulation (EUDR), adopted in June 2023. It requires companies to prove that supplied products are not linked to deforestation or land degradation after December 31, 2020. The regulation, whose implementation had been repeatedly delayed, is now scheduled to take effect on December 30, 2026.

South America’s agricultural sector, already equipped with advanced traceability systems and high production efficiency through multiple annual harvests and integrated agro-landscape models, is increasingly viewed as one of the key suppliers to European markets.

Geopolitics increases the region’s importance

South America’s growing role comes amid rising global trade instability and increasing tariff barriers. In 2025, the United States raised tariffs on Brazilian imports to 50% from the previous 10%, one of the highest levels globally.

Commodity market reactions highlighted the urgent need to accelerate innovation, strengthen traceability systems, and diversify export destinations beyond traditional trading partners.

Investment and technological leadership

Despite external risks, the region continues to attract strong investment inflows. In 2025, foreign direct investment into Brazil totaled USD 77.7 billion, up 5% from 2024. In January 2026 alone, inflows reached USD 8.2 billion, up 23% year-on-year.

Much of the investment growth is linked to government initiatives, including the New Industry Brazil (NIB) program and the Brazil Climate Investment Platform (BIP), both aimed at promoting technology transfer and sustainable development.

A significant share of capital is being directed into traceability systems and biological products — segments where Brazil already holds leading positions in scalability and innovation.

Biological products as a driver of agricultural transition

Brazil is effectively becoming a global testing ground for agricultural biotechnology. The use of biological crop protection products is increasing yields while reducing dependence on chemical pesticides.

The country’s agricultural biologicals market was valued at USD 914.2 million in 2025 and is projected to reach USD 1.33 billion by 2034, with a CAGR of 4.28% during 2026–2034.

Around 72% of biological applications are concentrated in row crops, primarily soybeans and corn, where these solutions help improve yields and meet export market residue requirements.

The role of scientific infrastructure and government support

A key driver of development remains Brazil’s national research center Embrapa, one of the world’s leading public agricultural innovation institutions, which continues to expand digital agriculture initiatives.

Additional support comes from government programs including the low-carbon agriculture program ABC+ and the Harvest Plan, with a budget of approximately USD 95 billion aimed at scaling sustainable production and advancing biological and regenerative farming.

Industry events and ecosystem consolidation

Against this backdrop, the World Agri-Tech forum will take place in São Paulo at Hotel Unique in June 2026, bringing together around 600 leaders from the agricultural sector.

The agenda will focus on scaling sustainable agriculture, agri-finance, biotechnology, and the implementation of artificial intelligence to improve production efficiency.

The event will gather executives from agribusiness holdings, CPG companies, technology startups, investment funds, government institutions, and the scientific community.

The program includes plenary sessions, industry panels, startup pitches, closed roundtables, and 1:1 meetings aimed at developing partnerships and investment projects in the agricultural sector.

South America as the future center of the global food market

Experts note that amid global population growth, South America is becoming a key region for ensuring global food security.

Against the backdrop of climate instability, geopolitical turbulence, and supply chain transformation, the region seeks to strengthen its status as a supplier of competitive, sustainable, and fully traceable agricultural products.

Cooperation among all participants in the agricultural ecosystem — from producers and traders to investors and technology companies — is becoming the key factor for future success.

Tags: Brazil, agricultural sector