Brazil's competition authority allows soy moratorium to continue pending year-end decision

By Roberto Samora and Oliver Griffin

SAO PAULO, Sept 30 (Reuters) - Brazil's competition watchdog voted on Tuesday to allow the nation's soy moratorium to continue at least through the end of the year.

The 5-1 vote by CADE marked a turnaround after the antitrust agency's reporting councilor for the case voted against an appeal filed by soybean traders and processors.

The two-decade-old private pact seeks to protect the Amazon rainforest by barring soybean traders from buying from farmers who cleared land there after July 2008. However, it represents a potential breach of Brazilian law by reducing competition.

BACK AND FORTH

In August, CADE's superintendent ordered the agreement suspended, arguing it functions as a cartel, giving signatory companies an unfair advantage over farmers.

A federal judge blocked that order on appeal from trading companies, pending a full review by the CADE council.

On Tuesday councilor Carlos Jacques Gomes opened proceedings to back the superintendent's decision, citing competition issues and raising concerns about the pact's potential to increase the bargaining power of trading companies when purchasing soybeans from farmers.

TIME FOR DIALOGUE

Councilor Jose Levi Mello do Amaral Junior followed by partially granting the trading companies' appeal, ordering the suspension of the pact to be put on hold until December 31.

Freezing the suspension will give companies like traders and processors time to talk with soybean producers, who argue that the moratorium represents a cartel, said Amaral Junior, who was joined by three of his colleagues.

Council President Gustavo Augusto Freitas de Lima agreed to grant more time before a final decision was made, but disagreed with Amaral Junior on a number of other points.

INDUSTRY REACTION

Abiove, the industry group representing soybean traders and processors and which was involved in the lawsuit, said the new deadline will allow time for the parties to work toward a solution.

"Abiove will continue to monitor developments at CADE and remains available to collaborate with the relevant authorities to promote legal certainty and regulatory predictability in the sector," it said in a statement.

However, farmers group Aprosoja Mato Grosso - which says the corporate agreement is unfair and keeps some farmers out of the market - celebrated the ruling, painting it as the beginning of the end for the Soy Moratorium.

"(Aprosoja) celebrates the decision by CADE councilors to maintain preventive measures against the Soy Moratorium, suspending this illegal agreement as of January 1, 2026," the group said in a statement.