Argentina soymeal exporters position for EU demand as deforestation rules threaten Brazil trade

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Argentina, EU soymeal, deforestation

Highlights

FEFAC estimates that up to 4 million tons, or 17%, of Brazil's soymeal exports to the EU could be excluded under the new EUDR rules.
Argentina, rated 'low-risk' by FEFAC and backed by its VISEC traceability system, expects nearly all its soymeal crop in H1 2027 to comply with EU deforestation regulations.
Paraguay, also rated 'low-risk' by FEFAC due to longstanding deforestation limits, positions to increase EU soymeal exports as Brazil redistributes trade to alternative markets.

Compliance gap reshapes soymeal flows

As reported by Reuters, Brazil's soybean industry says the EU's anti-deforestation regulation, or EUDR, risks curbing soymeal exports to the bloc because traceability demands are harder to meet across some of the country's main producing regions.

Brazil is the EU's largest supplier of soybean meal for animal feed, accounting for about half of the bloc's imports last year, according to data from the European Feed Manufacturers' Federation, or FEFAC. Brazil exported a record 23.3 million metric tons of soymeal in 2025, but FEFAC warns that the new rules could shut out up to 4 million tons, about 17% of total exports.

In FEFAC's latest assessment of how anti-deforestation rules may affect supply chains, Brazil receives a medium-risk rating. The group says Mato Grosso and other producing states face structural and logistical hurdles that may limit the expansion of fully EUDR-compliant supply chains.

Dante Romano, research manager at Rosario-based grains broker Max Agro, says farmers in central Brazil are more than 2,000 kilometres from sea ports and often rely on shifts between trucks, barges and trains, making export chains harder to trace. By contrast, Argentina's main soy-growing lands are within 350 kilometres of the Rosario port hub, which lowers the cost and complexity of compliance.

Argentina and Paraguay see room to gain

Argentina's crushing industry is positioning itself to capture any EU demand left unmet by Brazilian exporters. Gustavo Idigoras, president of Argentina's CIARA-CEC grains exporters and crushers chamber, says the country can fill that gap and points to the VISEC traceability system, which tracks soybeans and beef from production through export and is already fully operational.

FEFAC assigns Argentina a low-risk rating for EUDR-related disruptions and projects that nearly all of the country's soymeal crop in the first half of 2027 will meet the requirements. Argentina is already the world's largest soymeal exporter, shipping about 27 million metric tons last year, with roughly a quarter going to Southeast Asia.

Romano says Argentina could benefit from any shortfall in Brazilian shipments, while Brazil may seek to redirect more volumes to alternative markets if Argentine exporters send more product to Europe. Paraguay also says it has favorable structural conditions to meet the EU rules, and FEFAC gives the country a low-risk rating after long-standing limits on deforestation in its main soy-growing region.

The trade shift comes as relations between the EU and Mercosur remain sensitive following their provisional free-trade agreement in May. In Brazil, the regulation is also arriving just before Luiz Inacio Lula da Silva begins a new presidential term, adding political weight to an issue that the country's farm sector says unfairly targets its producers.

Our earlier coverage of the WTO’s warning on lasting trade impacts showed how wars, tariffs and repeated disruptions are pushing companies to redesign supply chains and shipping routes for resilience, even at higher cost. The WTO also pointed to sharp contractions in Middle East trade and argued that diversification and more regional trade could persist beyond the immediate conflicts.

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