The global food market has once again incorporated a significant risk premium into prices, in light of the combination of extreme weather events, geopolitical tensions, and logistical disruptions. Data released by the United Nations Food and Agriculture Organization (FAO) show that the Food Price Index rose to 133.3 points in August, up 1.9% from July.
The move aligns with warnings from NOAA’s Climate Prediction Center (CPC) of the United States National Oceanic and Atmospheric Administration (NOAA), which indicates a probability above 90% of the consolidation of a strongly intensified El Niño in the final months of the year.
Even in a volatile environment, Brazil reinforces production capacity. The National Supply Company (Conab) estimates Brazil’s grain harvest at 361.7 million tonnes.
In parallel, data from the Ministry of Development, Industry, Trade and Services (MDIC) indicate that agribusiness exports totaled US$ 57.85 billion between January and August, up 9.45% from the same period in 2025.
For the sector, the challenge is to turn this productive leadership into a permanent strategic advantage, while dependence on around 85% of imported fertilizers remains a long-term constraint.
The Guarantor
The dimension of Brazilian agribusiness on the international stage goes beyond cyclical climate fluctuations in competing countries. Brazil is the world leader in production and export of soybeans, sugar, coffee, orange juice, and beef. To Broadcast Agro (the real-time news system of Grupo Estado), Itaú BBA’s Agro Consulting assesses that this position results from a structural process, with continuous productivity gains, consolidation of the second harvest, genetic adaptation to tropical climate, and integration between farming and cattle.
“An external climatic event can even push prices and accelerate shipments within a specific window, but it does not explain shares of this magnitude. What happens in these moments is that one thing becomes more visible: when supply is scarce somewhere in the world, demand turns toward Brazil. The country already functions as a kind of guarantor of global food security.”
Geopolitical Game
Despite Brazil’s dominance in oilseed supply, USDA reports indicate that China maintained sizable purchases of soybeans from the United States in the last weeks of August, while shipments through Brazilian ports advanced. The move rekindles the debate about Beijing’s willingness to pay a premium to diversify suppliers and reduce the concentration of purchases in a single origin.
According to Itaú BBA’s analysis, the behavior of Chinese state-owned trading companies reflects a search for strategic security in times of off-season in South America, and not a loss of competitiveness in domestic production. “China has learned, in recent years, that depending on a single origin is costly, and that cost shows up precisely when the market tightens. It keeps both windows open: buying from Brazil when our harvest is flowing and returning to the US in the South American off-season, which is exactly the moment we are living in now.”
The consultancy reinforces that a large part of the purchases in the US has been made by state-owned enterprises, in the context of the trade agreement, and not by the massive private firms, which remain penalized by the additional 10% tariff on American products. “That shows that, where the decision is purely economic, China continues to prefer the cheaper origin.”
The commodity analyst at Agrinvest Commodities, Samuel Mertens, adds that the additional volumes directed to the North American market have an institutionalized commitment bias. “This agreement has a much more geopolitical and commercial objective than purely strategic for soybeans, as China has been reducing its dependence on American soybeans over the last decade.”
Dual Cost Exposure
While the export edge remains strong, the cost structure in the field remains exposed to variations in imported inputs. Brazil consumes about 8% of global fertilizer production and imports approximately 85% of this demand, which transfers the effects of international price fluctuations and foreign exchange rates to soybean and corn crops.
According to Itaú BBA, this dependence creates a double direct exposure to the profitability of the rural producer. “The exposure is high, through two channels at once: the international price of the input and the exchange rate. When the dollar rises, fertilizer becomes more expensive in reais, even if the price abroad stays stable. It’s a double exposure that the producer cannot neutralize just through management. The best thermometer for this exposure is the terms of trade. In 2026, it broadly worsened: for soybeans, a ton of MAP rose from about 25–30 sacks in 2025 to 30–35 sacks; for corn, the same ton moved from 40–50 to 50–60 sacks. This means a direct loss of purchasing power for the producer,” say Itaú BBA analysts.
The dynamics of the inputs market also have seasonal specifics among different crops. Tomás Pernias, StoneX market intelligence analyst, notes that the purchasing window for the main soybean season is nearly closed, which focuses attention on fertilizing for the second corn crop. “As soybean planting gets closer, the import window for fertilizers used on soybeans is nearly closed. For corn, we are still at the stage of high consumption for replenishment and rebuilding of nitrogen stocks in Brazil. Since the safrinha occurs next year, it is in the second half of the year that nitrogen imports tend to gain momentum. An escalation of conflict in the Middle East, higher oil, and higher costs for natural gas could still affect the cost of safrinha inputs,” he cautions.
Agricultural Exports and Domestic Supply
Parallel to the rising revenue from export commodities, crops aimed mainly at domestic consumption, such as rice and beans, face reductions in area in traditional regions. Mertens assesses that the move should not be read as a direct conflict between supply chains, but as an economic response to capital profitability. “I don’t see this move as a conflict between a Brazil focused on agro-exports and another oriented to the domestic market. It is, above all, a result of the rational allocation of land and capital: the producer directs resources to crops that offer higher risk-adjusted returns. If we want to preserve the rice and beans supply, the path is not to force the producer to plant these crops, but to make them economically competitive.”
The consolidation of Brazil as a pillar of global food security reflects technological and scale gains accumulated over decades. Still, maintaining crop growth and preserving the financial margins of rural producers remain conditioned on the country’s ability to manage production costs amid volatility of international inputs, balancing the expansion of external sales with domestic supply.
