- Brazil–China agricultural trade, valued at $47 billion annually, drives 25% of global deforestation risk linked to commodity supply chains
- 52% of Brazil’s agricultural exports go to China, while Brazil supplies 34% of China’s agricultural imports
- Targeted action in just 73 Brazilian municipalities could significantly reduce global deforestation exposure
A single trade relationship now sits at the center of global deforestation risk. According to new analysis from Trase, the agricultural trade corridor between Brazil and China accounts for a quarter of all deforestation risk embedded in international commodity flows.
Valued at nearly $47 billion annually, the partnership is the largest agricultural trade link in the world, surpassing US–China flows by roughly 40%. The scale alone gives it outsized influence over land use, forest protection, and climate outcomes.
Trase’s findings show that more than half of Brazil’s agricultural exports are destined for China, while over a third of China’s agricultural imports originate from Brazil. That level of interdependence has created what analysts describe as a systemic nexus between food security, economic stability, and environmental risk.
Concentrated Risk Creates Opportunity for Targeted Action
Despite the scale, the deforestation footprint is not evenly distributed. Trase identifies a high degree of concentration in specific regions, opening the door to targeted intervention.
More than 1,500 municipalities in Brazil supply soy to China, yet just 73 are responsible for 75% of the deforestation risk tied to that trade. This concentration suggests that policy alignment, traceability improvements, and corporate sourcing commitments could deliver outsized impact without disrupting broader trade flows.
For policymakers and investors, this creates a rare leverage point. Focused governance measures, including stricter land-use enforcement and supply chain transparency requirements, could materially reduce emissions linked to agriculture while preserving trade volumes.
Climate Volatility Is Already Disrupting Supply Chains
The risks are no longer theoretical. Climate-linked shocks are beginning to erode agricultural output and economic performance across Brazil’s key producing regions.
A severe drought in 2020 cut soy and maize production in Rio Grande do Sul by 46% and 32% respectively. More recently, drought conditions in the Amazon between 2021 and 2022 triggered an estimated $13 billion loss in the soy harvest. The result was a 12% drop in Brazil’s agricultural GDP in early 2022.
These disruptions highlight a feedback loop that is increasingly central to ESG risk assessments. Deforestation accelerates climate change, which in turn undermines agricultural productivity and supply reliability. For China, heavily reliant on Brazilian imports, this translates into direct exposure to climate-induced supply shocks.
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A Strategic Pathway for Bilateral Climate Leadership
Trase argues that Brazil and China are uniquely positioned to reshape global agricultural supply chains through coordinated action. The report outlines five strategic areas where existing policies and business initiatives could be scaled to reduce environmental impact while maintaining economic growth.
“Brazil and China have outsized potential to influence the sustainability of global agricultural supply chains and contribute to safeguarding food security for billions of people,” says André Vasconcelos, Global Engagement Lead at Trase. “At a time when multilateral action faces growing challenges, bilateral cooperation can offer an effective pathway to deliver significant environmental and economic gains”.
The concept, described as the “Beijing-Brasília effect,” positions bilateral cooperation as a catalyst for broader South–South collaboration. Rather than relying solely on fragmented global agreements, aligned trade partners could establish scalable models for sustainable sourcing, traceability, and low-carbon agriculture.
“Scaling up this cooperation can help set a powerful proof of concept, a Beijing-Brasilia effect, paving the way for broader South-South cooperation on sustainable trade,” Vasconcelos adds. “The foundations for unlocking this effect are already firmly in place: a proven record of environmental leadership, the significance of the bilateral trading partnership, and the central role of deforestation and low-carbon agriculture in ensuring supply chain resilience”.
What This Means for Executives and Investors
For C-suite leaders and investors, the implications are immediate. Supply chain exposure to deforestation risk is becoming a material financial and reputational concern, particularly as disclosure frameworks tighten and regulatory scrutiny intensifies.
The Brazil–China corridor represents both a concentration of risk and a potential blueprint for mitigation. Companies operating within this trade network face increasing pressure to demonstrate traceability, enforce zero-deforestation commitments, and align with evolving ESG standards.
At the same time, the scale of the relationship offers a rare opportunity. Coordinated action between two dominant players could reshape global norms around agricultural trade, influencing everything from procurement standards to financing conditions.
As climate volatility intensifies and food security rises on the geopolitical agenda, the stakes extend far beyond bilateral trade. The decisions made between Beijing and Brasília will help determine whether global commodity markets accelerate deforestation or become a lever for its decline.
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