Global Grain Giants Consider Dropping Soy Pact as Mato Grosso Tax Incentives Come Under Pressure

In short:

Global grain trading giants are weighing an exit from the Soy Moratorium to safeguard tax incentives in Mato Grosso, Brazil’s largest agricultural state, according to two people with direct knowledge of the matter.

A preliminary report released by state auditors in April found that grain traders received roughly 4.7 billion reais ($840 million) in tax benefits between 2019 and 2024. Archer-Daniels-Midland Co. and Bunge Global SA were the largest beneficiaries, each securing about 1.5 billion reais ($269 million), according to official data reviewed by Reuters.

U.S.-based ADM, Bunge and Cargill Inc., along with China’s Cofco International and Brazil’s Amaggi, are signatories to the pact and operate facilities in Mato Grosso that have benefited from the incentives. It remains unclear which companies would move immediately to withdraw from the moratorium.