Paraguayan soybean farmers caught in the crossfire of global trade tensions [World News]

Trade frictions and new regulations hit exports

Paraguay, the world’s third largest soybean exporter, is struggling with market instability caused by global tariff wars, particularly between the US and China. Soybean price fluctuations as a result of these tensions have significantly reduced farmers’ incomes. In addition, exporters face further challenges – the European Union is introducing new regulations to take effect from December 2025. These will require imported soya to be free from deforestation. This deadline was pushed back after pressure from exporting countries, including Paraguay.

Paraguay, which does not have direct trade relations with China because of its alliance with Taiwan, is hoping to redirect Chinese demand to South American soybeans. According to farmers, this could benefit the agricultural sector, despite the current difficulties.

Hope in improving climatic conditions and logistics

After a difficult season in which drought reduced the soybean harvest to around 8.5-9 million tonnes, forecasts for the coming year are more optimistic. Favourable weather conditions are expected to boost production to as much as 10.9 million tonnes in the 2025/26 season. Better rainfall is also expected to raise river levels, improving transport in the landlocked country.

Despite the positive outlook, farmers and exporters remain cautious. Uncertainty arising from global trade tensions and upcoming regulations may still affect their business. However, in their view, the situation could also open new doors, especially if Chinese demand shifts further towards South America.