Market diversification and input dependence challenge Brazil agricultural exports
Brazil is the world’s leading net exporter of food and agricultural commodities, supported by a robust farm production chain and strong global demand for products such as soybeans, coffee, animal protein and sugar.
Even so, Brazil agricultural exports face important challenges if the country is to consolidate its position in the years ahead, according to an analysis by Rabobank.
The Dutch bank says resilient growth will depend on reducing Brazil’s dependence on imported agricultural inputs while also diversifying export destinations and products.
According to the study, rising demand for Brazilian agricultural imports, especially in China and the rest of Asia, has driven export growth. China is by far the largest single destination for Brazil’s food and agricultural exports, accounting for about 33% of their total value.
The European Union and the United States, in turn, together represent 54% of Brazilian food and agricultural exports by value.
A sector-by-sector analysis further illustrates the degree of concentration among export destinations. China ranks among the top three destinations for nine of the 10 commodities covered in the study. For six of those 10 commodities, the three largest destinations account for more than 50% of Brazil’s exports.
“With the most strategic trade partners, deepening relationships, dialogue and understanding of priorities, while increasing preparedness and the ability to adapt to new scenarios, will help Brazilian agribusiness maintain export growth and increase its resilience in a more uncertain geopolitical environment,” Rabobank said in the study.
Product diversification offers another path
Product diversification may offer another route to resilience and market access, the report says.
One example is Brazil’s exports of distillers dried grains, or DDGS, a co-product of corn ethanol. These shipments were almost nonexistent a decade ago but have grown as domestic corn ethanol production has expanded.
Since 2023, Brazilian DDGS have gained access to 21 international destinations in a market historically dominated by U.S. exports.
Rabobank acknowledges, however, that diversifying export markets will not be easy. In China’s case, the country led global consumption growth over the past decade for commodities such as soybeans and beef.
For those two commodities, the increase in Chinese imports during the period was larger than the combined increase recorded by the world’s next 10 largest importers. In the short term, therefore, the interdependence between China and Brazil in food and agricultural trade will not disappear.
According to Rabobank, the recent example of beef quotas announced by China highlights the dilemma created when a major trade partner changes course.
In 2025, China imported 1.7 million metric tons of Brazilian beef, equivalent to 48% of Brazil’s total exports. China’s 1.1-million-ton quota for 2026 is, in practice, pushing exporters to redirect a significant volume to other markets — equivalent to 17% of Brazil’s 2025 exports.
Foreign trade data from Datamar already point to a sharp drop in frozen beef shipments to China. In July 2026, seaborne shipments totaled just 2,350 TEUs, down nearly 80% from June.
Beef Exports to China | Jan 2023 – Jul 2026 | TEUs
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“One of the main lessons from this experience is that, with the most relevant and strategic partners, there is a strong case for deepening relationships, dialogue and understanding of their priorities. This can contribute to better anticipation of possible changes in their agricultural and trade policies, increasing the capacity to prepare for and adapt to new scenarios,” Rabobank said.
New markets may reshape demand
In the long term, market forces themselves may support part of the diversification of export destinations, the report says.
United Nations demographic projections indicate that global population growth will be driven by regions such as Africa, the Middle East and Southeast Asia, while the populations of China and the European Union are expected to decline.
“It is reasonable to imagine that this will be reflected, to some extent, in the distribution of global demand for agricultural commodity imports. Meanwhile, Brazil continues, and will continue, to make progress in improving access to existing markets and opening new ones, supported by the recent EU-Mercosur, Mercosur-EFTA and Mercosur-Singapore agreements,” Rabobank said.
Dependence on imported inputs remains a vulnerability
Rabobank also noted that Brazil’s rise as a major agricultural exporter has made the country increasingly dependent on imported fertilizers and crop protection products.
At the same time, growth in local refining capacity has lagged demand for fuels, with imports accounting for 25% to 30% of Brazil’s diesel consumption.
Around 80% of all fertilizers and crop protection products used in Brazil are imported, according to the study.
Rabobank said the geopolitical shift away from globalization and a rules-based world order toward a more fragmented environment carries implications for international relations and trade.
As an example, the bank cited the Middle East conflict involving the United States, Israel and Iran, which generated price shocks and concerns over fuel and fertilizer supply in 2026, echoing the effects of Russia’s invasion of Ukraine on those markets four years earlier.
Brazil’s dependence on imported fertilizers, crop protection products and diesel remains a major vulnerability, Rabobank said. Investments in domestic oil refining and fertilizer production will be essential to strengthening future resilience.
At the same time, the bank noted that Brazil, as a major supplier of key commodities, holds a certain degree of bargaining power and protection in situations where reducing Brazilian imports could have negative consequences for consumers in importing countries.
Source: Globo Rural