SÃO PAULO, BRAZIL — Soybean production in Brazil is forecast to rebound in 2019-20, rising 9% from the previous year to 124 million tonnes, according to an April 8 Global Agricultural Information Network (GAIN) report from the U.S. Department of Agriculture.

The increase is projected to occur even though planted area is expected to climb by only 1%, the USDA said.

“Although in the last five years planted area averaged 4% annual growth, Brazilian producers are expected to hedge their bets next season given the uncertainty surrounding soybean demand from China, which is the largest consumer of soybeans, as well as the larger importer of Brazilian soybeans,” the USDA said. “In addition, most of the available arable land has already been tapped in key producing states, and further sizeable area increases would require large upfront investments to convert degraded pasture land.”

Soybean yield is forecast to increase by 8% in 2019-20, from 3.16 tonnes per hectare to 3.4 tonnes.

The USDA forecasts soybean exports to increase by 9% in 2019-20 to 75 million tonnes, which would still be far below the 84.1 million tonnes Brazil shipped in 2017-18.

Brazil saw Chinese demand grow by more than 20% in 2018-19 due to the ongoing trade war between the United States and China.

“If current trade tensions with the United States are resolved, the local market expects that demand from China will also subside from the peak reached last year, and perhaps even fall below the 75% of total volume sourced that has been seen in recent years,” the USDA said.