Brazil’s long-standing Soy Moratorium, a pioneering voluntary agreement designed to curb deforestation in the Amazon by restricting the purchase of soy from recently cleared land, has been suspended following a ruling by the country’s antitrust authority.
On Monday, the General Superintendence of the Administrative Council for Economic Defense (SG/CADE) launched formal administrative proceedings against the Brazilian Association of Vegetable Oil Industries (ABIOVE), the National Association of Cereal Exporters (ANEC), and 30 multinational trading companies, including ADM, Bunge, Cargill, Louis Dreyfus, and Viterra. The authority alleges that the pact constitutes a potentially unlawful purchasing cartel.
As part of its decision, CADE ordered the suspension of the moratorium, which had been in force since 2008, and imposed preventive measures requiring companies to cease monitoring, information-sharing, and audit practices linked to the agreement. Websites containing documents related to the moratorium were taken offline on Tuesday in compliance with the ruling.
Superintendent Alexandre Barreto de Souza stated that the measures were necessary to avoid “irreparable harm to competition in the soybean export market.” CADE’s investigation was triggered by a 2024 request from Brazil’s lower house agriculture committee, where farmer-backed lawmakers argued that the moratorium unfairly restricted market access.
Farmers Celebrate, Traders Caught in the Middle
The suspension is seen as a major political victory for Brazil’s soy growers. “Farmers no longer need to rely on intermediaries to circumvent the moratorium,” said Mauricio Buffon, president of Aprosoja Brasil, a leading farm lobby. “This changes market dynamics significantly, even though most expansion in soy has been over pastureland, not forest.”, Reuters reported.
While growers welcomed the decision, major grain traders now face a regulatory dilemma. Many have relied on the moratorium to demonstrate compliance with international environmental standards, particularly in Europe, where deforestation-free supply chains are a growing legal requirement. China, Brazil’s largest buyer, has not imposed such restrictions but remains sensitive to reputational risks.
Legal and Political Battlelines
The moratorium’s suspension coincides with broader legal disputes. Brazil’s Supreme Court is currently reviewing three cases concerning whether states may refuse tax incentives to companies adhering to the agreement. A ruling on Mato Grosso’s ability to revoke such incentives from 2026 is expected later this week.
Industry groups ANEC and ABIOVE have indicated they will appeal CADE’s suspension order to the agency’s tribunal, which has five days to designate a reporting commissioner. Although preventive measures take immediate effect, a final decision on the legality of the moratorium may take years.
If violations are confirmed, ABIOVE, ANEC, and their member companies could face fines ranging from 50,000 reais to 2 billion reais ($365 million) for associations, and up to 20% of annual gross revenues for individual firms. CADE also left open the possibility of negotiating a Cessation of Conduct Term (TCC), a settlement mechanism frequently used in antitrust cases.
Environmental and Market Implications
Since its inception in 2008, the Soy Moratorium has been hailed as one of the most effective private-sector mechanisms for slowing Amazon deforestation. Its suspension marks a turning point in Brazil’s environmental governance, potentially undermining the credibility of sustainability commitments in global supply chains.
Environmental advocates fear that the ruling may embolden land clearing, even as some analysts argue that soy expansion is more likely to replace degraded pastureland than untouched forest. Still, the absence of a unified industry standard raises concerns about fragmented compliance regimes and heightened market uncertainty.
