Soybeans: a discreet and decisive geopolitical weapon

A crop without prestige or myth­o­lo­gic­al sig­ni­fic­ance, soy­beans have become a stra­tegic resource in less than a cen­tury, serving as a lever of influ­ence and an instru­ment of dom­in­a­tion. Mainly used to feed live­stock, this com­mod­ity has become essen­tial to meet­ing the large-scale demands of our meat-based diet. Com­pared to oth­er crops, “soy­beans are the most dynam­ic: annu­al har­vests are expec­ted to double between 2000 and 2025, from 175 to 420 mil­lion tons,” says Olivi­er Ant­oine, CEO of the con­sult­ing firm ORAE Géo­pol­i­tique and author of Géo­pol­i­tique du soja (The Geo­pol­it­ics of Soy­beans)¹.

Con­fined for thou­sands of years to north­east­ern China, in the province of Man­churia, soy­bean cul­tiv­a­tion only slightly spread to Japan and Korea. Recog­nised for its pro­tein con­tent for both humans and anim­al con­sump­tion, soy­beans spread through­out the world start­ing in the 1850s, with the Opi­um Wars. “The oil extrac­ted from soy­beans became very luc­rat­ive for China, to such an extent that it was its lead­ing export product for many years, ahead of silk and tea,” adds Olivi­er Antoine.

At the begin­ning of the 21^st Cen­tury, as China became an indus­tri­al power, a food trans­ition took place: domest­ic demand for meat exploded. “To meet this demand, Beijing had no choice but to import soy­beans, a key ingredi­ent in live­stock feed. The turn­ing point came when the coun­try shif­ted from being a pro­du­cer-export­er to a pro­du­cer-con­sumer, becom­ing the world’s largest importer.” 

On the oth­er side of the Pacific, shortly after Japan’s inva­sion of Man­churia in the 1930s, the United States decided to launch its own soy­bean pro­duc­tion to meet domest­ic demand, even­tu­ally becom­ing the lead­ing export­er and turn­ing it into a power­ful com­mer­cial, dip­lo­mat­ic, and geo­pol­it­ic­al weapon.

Cur­rently, the main pro­du­cers are con­cen­trated in North Amer­ica, with the United States, and South Amer­ica, with Brazil and Argen­tina. “These three coun­tries alone account for around three-quar­ters of glob­al soy­bean pro­duc­tion and 80% of glob­al exports. On the oth­er hand, imports are mainly driv­en by China, which accounts for 60% of trade,” explains the researcher.

Else­where, in Asia, Africa, and Lat­in Amer­ica, many coun­tries are see­ing their pop­u­la­tions become wealth­i­er and more urb­an­ised and are incor­por­at­ing meat into their diets. This nutri­tion­al trans­ition con­tin­ues to stim­u­late the soy­bean mar­ket. “It should be noted that around 80% of soy­beans pro­duced are used for anim­al feed.” The rest is sold in the form of oil for human con­sump­tion and is one of the three most widely con­sumed oils in the world.

Food secur­ity is one of Chin­a’s weak­nesses, and the coun­try remains depend­ent on imports for one of its most stra­tegic com­mod­it­ies: soy­beans. With a his­tory marked by epis­odes of fam­ine, Beijing is par­tic­u­larly cau­tious and seeks to pro­tect itself from the risks of socio-polit­ic­al instabil­ity that could res­ult from price increases. Its main sup­pli­er, the United States, is also its main geo­pol­it­ic­al and geoe­co­nom­ic adversary.

“In 2018, when Don­ald Trump decided to impose a 25% tar­iff on Chinese steel, Xi Jin­ping retali­ated by impos­ing a 25% tar­iff on Amer­ic­an soy­beans,” con­tin­ues Ant­oine Olivi­er. The doc­tor of geo­pol­it­ics explains that Amer­ic­an soy­beans are pro­duced in the grain belt (Illinois, Iowa, Wyom­ing), which is made up of strongly Repub­lic­an regions that brought Don­ald Trump to power. Tax­ing soy­beans is tan­tamount to strik­ing at the Amer­ic­an pres­id­ent’s elect­or­al base. This cus­toms retali­ation cost the United States $28 bil­lion in com­pens­a­tion and com­pens­a­tion nets for Amer­ic­an soy­bean farmers.

Beijing took advant­age of this trade dis­pute to divert some of its pur­chases to Brazil. “By study­ing the soy­bean value chain, from seed to final pro­cessing, Chinese com­pan­ies have become involved in every stage of pro­duc­tion.” It fin­ances logist­ics infra­struc­ture to devel­op pro­duc­tion areas in Brazil, Argen­tina, and Paraguay, and owns numer­ous pro­cessing plants.

The largest soy­bean stor­age and pro­cessing area in South Amer­ica, in the port of San­tos in Brazil, belongs to COFCO (China Nation­al Cer­eals, Oils and Food­stuffs Cor­por­a­tion). “This Chinese state-owned con­glom­er­ate is designed to com­pete with the four major Amer­ic­an com­pan­ies that man­aged 80% of the grain trade (ADM, Bunge, Car­gill, Drey­fus).” Today, COFCO is one of the world’s largest soy­bean traders. China has suc­ceeded in redu­cing its depend­ence on US imports and par­tially dom­in­at­ing the value chain of its new suppliers.

“The his­tory of soy­beans tells the story of the United States’ desire to become the world’s lead­ing agri-food power. It accom­pan­ies Brazil’s entry into the court of nations while reveal­ing the fra­gil­it­ies and con­tra­dic­tions of Chin­a’s rise to power. In short, soy­beans are a reveal­ing indic­at­or of state strategies,” con­cludes Olivi­er Antoine.

Alicia Piveteau