Amazon Fires Could Alter Global Soy Trade
Fires in the Amazon are likely to alter global soy trade in the future. Jim Bower of Bower Trading points out in his daily newsletter that many of the fires are started by humans to clear the land for crops. More than 75,000 fires have been reported since January, an 84 percent annual increase. Bower suspects that China is behind the increase as the trade war between the U.S. and China is escalating. China, the world’s largest consumer of soybeans, is seeking alternate markets after blocking imports from the United States, even though China made small purchases of U.S. soybeans last week. The land clearing of the Amazon is seen as a way to capture soy demand previously filled by U.S. producers. If true, the increase in production area in Brazil could permanently change soybean trade. The fires had the attention of the G7 Summit in Europe, with some nations saying they would block a trade agreement between the European Union and Brazil until Brazil takes action.