Smallholder farmers in places like southeast Asia are some of the world’s most deprived communities. They work hard day and night, often in very taxing conditions, to put food on the table and feed their families. Their plight goes largely ignored in the West. In fact, sometimes we in Europe are guilty of making their economic situation even worse by failing to understand the consequences of our actions.
That is exactly what the European Union is in danger of doing with a new policy called the Due Diligence Proposal. The idea behind this policy is to make supply chains for goods sold in Europe more environmentally sustainable. However, what it sounds like in theory is very different from what it does in practice. Instead of asking multi-billion-dollar trans-national corporations to take on the cost of their new checks, who can shoulder the burden, the EU instead looks set to implement the new rules in such a way that the smallholder farmers at the very beginning of the supply chains end up responsible.
As if it were not bad enough to lump farmers with immense new costs and responsibilities because of European politics, it looks likely that the law will not even succeed in achieving what European politicians say they want to achieve. The way the due diligence proposal is written out does not make sense. That’s because addressing a complex environmental issue like deforestation is not as simple as merely drowning products you don’t like in red tape.
The EU champions this law as a means to curb deforestation, but scant information is available about the specifics of how they see these verification checks working, their associated costs, and the hurdles they pose for legitimate businesses operating in Europe. Upon closer examination, numerous glaring flaws in the legislation emerge, such as the fact that it might end up exacerbating deforestation rather than mitigating it.
“The Middle East has become much more stable, conflicts have significantly decreased, and maritime shipping through the Red Sea and the Suez Canal is expected to fully resume soon,” said Dan Basse, President and Founder of AgResource Company, at the 35th annual IAOM Mideast & Africa Conference & Expo in Jeddah, Saudi Arabia.
Saudi Arabia is playing a key role in the development of the grain market, becoming a regional hub for storage and distribution while ensuring food security for the region. According to Basse, the country is shifting from a subsidized domestic production model to a fully import-reliant, privatized system, sourcing wheat from Germany, Poland, Lithuania, the Black Sea region, Australia, and North America.
SABIL, operating under the Saudi Agricultural and Livestock Investment Company (SALIC), manages grain ports, storage facilities, and logistics across the country. Mauro Barbieri, Chief Operating Officer, emphasized that the company’s priority is food security and ensuring mills are fully supplied with grain nationwide. SABIL is also expanding its portfolio to include corn, soybeans, and barley.
According to SABIL, the company operates 14 grain facilities, including four port terminals, with a total storage capacity of around 2.7 million tons. At the same time, local farmers continue to produce high-quality wheat, allowing a balance of imported and domestic grain to optimally supply the mills.
Wheat demand in Saudi Arabia is rising, noted Abdullah Ababtain, CEO of First Mills. He highlighted the importance of the country’s large-scale grain infrastructure in supporting neighboring markets during periods of geopolitical risk or supply disruptions. Investments in storage capacity are becoming increasingly critical in light of climate change.
As the final bells ring across the Chicago Board of Trade this December 31, 2025, the narrative of the global grain market has shifted from one of geopolitical panic to one of overwhelming abundance. Corn, soybean, and wheat futures are closing the year at multi-year lows, capping a second half of 2025 defined by record-breaking harvests in the United States and aggressive expansion in South American production. The transition from "scarcity pricing" to "abundance management" has caught many producers off guard, leaving the agricultural sector to grapple with thin margins and a glut of inventory.
The immediate implications of this slide are profound. For the American farmer, the 2025 season has been a "yield-rich, cash-poor" year, where record-breaking productivity has ironically depressed the very prices needed to cover rising input costs. On the global stage, the United States is increasingly finding itself sidelined as China and other major importers pivot toward cheaper Brazilian and Argentinian origins, signaling a structural shift in global trade routes that may persist long into 2026.
A Wall of Supply: The Mechanics of the 2025 Slide
The primary catalyst for the year-end retreat was the realization of a historic U.S. harvest. By late November, the USDA’s World Agricultural Supply and Demand Estimates (WASDE) confirmed that the U.S. had achieved a record corn yield, projected between 181 and 183 bushels per acre. This resulted in a total production of approximately 16.75 billion bushels, a figure that effectively smothered any hope of a late-year price rally. Corn futures, which began the year with some optimism, have settled into a range of $4.42 to $4.48 per bushel as 2025 concludes.
SOFIA, BULGARIA — Extreme summer heat and drought lowered Bulgaria’s sunflower production estimates in 2025-26 but the nation harvested a higher-than-expected rapeseed crop, according to a report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture.
Sunflower production is estimated at 1.66 million tonnes, close to the 2024-25 level while rapeseed production is estimated at 295,000 tonnes, an increase of 84% from last year’s harvest. Expanded area and favorable weather supported good rapeseed yields exceeding earlier expectations, the FAS said.
The supply situation is forecast to lead to growth in rapeseed crush, and stagnant or slightly lower sunflower crush while exports of oilseeds will likely decline, it said.
The fall planting of 2025-26 rapeseed occurred in relatively good but not optimal conditions. Farmers made strong efforts to expand the planted area, with 34% more hectares.
“The growth in area planted promises an increase in production, if the weather cooperates, to around or over 350,000 tonnes,” the FAS said.
Domestic rapeseed crush strengthened significantly due to the expansion of crushing facilities for biodiesel and a domestic and regional shortage of sunflower seeds. Crush increased 39% from a year ago to 138,000 tonnes, as of Nov. 15.
As a result of the elevated crush, exports of processed products (rapeseed oil and meal) also are expanding. Dynamic crush demand drove prices sharply higher and the rapeseed crop was reported as the most profitable crop for farmers this season, the FAS said.
With limited domestic sunflower seeds, crushers have made every effort to source sunflower seeds from domestic producers and imports. Processing capacities continue to expand to over 4.5 million tonnes, driving demand and prices, the FAS said.
Imports faced several challenges, including a regional deficit and strong crush demand in traditional exporting Black Sea countries. As a result, imports as of mid-November were only 73,000 tonnes or 43% less than 129,000 tonnes imported in the corresponding period a year ago.
This led to a 15% decline in crush to 321,000 tonnes (mid-November 2025-26) compared with 364,000 tonnes in the same period of 2024-25. According to the crushing industry, most factories operate at or below 30% of their capacity.
Beijing seeks food security in the face of economic challenges and pressures from urbanisation
[BEIJING] China must stabilise grain and edible oil production, improve grain varieties and enhance quality, state news agency Xinhua said on Tuesday (Dec 30), following a meeting of the annual Central Rural Work Conference from Dec 29 to Dec 30.
The group, which sets China’s agricultural priorities, pledged to “enhance the capacity for diversified food supply” and “promote high-quality development of high-standard farmland through zoned and categorised planning,” Xinhua said.
China is highly reliant on imports to feed its people and tensions with the US, a major agricultural trading partner, have accelerated a domestic self-sufficiency drive that includes investments in machinery and seed technology.
“We must not relax our efforts in grain production, promote the integration of high-quality land, high-quality seeds, high-quality machinery and high-quality farming methods to enhance the overall agricultural production capacity and quality,” according to a readout of the meeting released by Xinhua.
The readout said China would “make every possible effort” to increase farmers’ income and promote stable employment for migrant workers, as Beijing seeks food security in the face of economic challenges and pressures from urbanisation.
The readout also said China would launch province-wide pilot programmes to extend rural land-use contracts for another 30 years after current contracts expire around 2027.
China’s total grain output hit a new record this year, up 1.2 per cent from 2024 to 714.9 million tons, according to statistics bureau data released earlier this month. REUTERS
Following Russian attacks on December 20th on sunflower oil storage facilities at the port of Pivdenny near Odesa, tanks were damaged, triggering significant and potentially damaging marine pollution. Witnesses reported that the vegetable oil quickly covered neighboring areas, and soon reached the Adzhalik estuary. Unfortunately, the spill was not contained within the estuary in time; by December 24th, the oil spill had reached the shoreline within the city of Odesa. The pollution has affected waterbirds, with around 300 birds reported to be rescued and taken to the Odesa Zoo for rehabilitation.
What does it mean for wildlife? In its initial stages, while liquid, a spill of food oil stays at the top of seawater. This results in smothering and coating in a physical way similar to a fossil fuel spill, though it is not as toxic if ingested. Wildlife suffers physical effects becoming coated with the oil that can result in death through hypothermia, dehydration, diarrhea, starvation, or suffocation from the clogging of nostrils, throats, or gills. Often the numbers of birds rescued is just a fraction of the total numbers lost.
What to expect? Vegetable oil normally breaks down more quickly as bacteria and fungi can metabolize it more easily than crude or refined fossil oils. However, the speed depends on the temperature; at winter temperatures, sunflower oil can congeal and partially solidify, slowing the breakdown and prolonging the physical impacts. If it does break down in the sea, it will consume oxygen from the water, resulting in a reduction of oxygen available for fish and other aquatic fauna.
From the docks of the Port of Santos, a 58-terminal complex covering an area the size of 1,500 American football fields, ships loaded with soybeans prepare to set sail for China.
Less than 45 miles from São Paulo, the port services nearly a quarter of Brazil’s soybean exports. For decades, U.S. agribusiness giants like Archer Daniels Midland, Bunge and Cargill have operated facilities at the port.
Today, they share space with COFCO International, China’s state-owned food conglomerate, which has invested around $285 million in recent years. The expansion will make it the port’s largest dry bulk terminal.
Share of China's soybean imports, by country
And Santos isn’t alone. In the west, the Port of Chancay is rising on Peru’s central coast.
COSCO Shipping, a state-owned Chinese company, is investing at least $3.5 billion to construct 15 berths, logistics facilities, and a 1.1-mile tunnel, enabling cargo to be channelled directly from the port to nearby highways.
Once fully operational, Chancay will function as a regional redistribution hub for exports from Peru, Argentina, Brazil, Chile, Ecuador and Colombia: from copper and lithium to soybeans and other agricultural products. Upon completion around 2035, it is expected to become the region’s third-largest port.
These and other recent investments across the region have positioned China to source more agricultural products from Latin America as it pivots away from U.S. farmers in response to President Trump’s higher tariffs.
China first began that pivot in 2018, when Trump’s first-term tariff hikes ignited a global trade war. But since returning to office, the president has renewed that strategy, and China’s investments signal a generational shift that may not reverse if and when the trade war subsides.
Politico’s Dana Nickel reported that “the Federal Communications Commission (last week) blacklisted all new foreign-made drones and components over concerns the equipment poses ‘an unacceptable risk’ to national security — ensnaring Chinese drone-maker DJI after long-time concerns that the tech gives Beijing a foothold inside U.S. critical infrastructure.”
“The tech was placed on the commission’s ‘Covered List,’ barring DJI and other foreign drone manufacturers from receiving the FCC’s approval to sell new drone models for import or sale in the U.S,” Nickel reported. “In Monday’s announcement, the agency said that the move ‘will reduce the risk of direct [drone] attacks and disruptions, unauthorized surveillance, sensitive data exfiltration and other [drone] threats to the homeland.'”
“But the rule won’t ground the thousands of unmanned aircraft already deployed in the U.S. The FCC said Monday that the decision ‘does not affect drones or drone components that are currently sold in the United States,’ according to the agency, meaning that drones previously authorized by the FCC are still usable,” Nickel reported. “A spokesperson for the FCC did not immediately respond to questions about potential plans to retroactively ban foreign-made drones or components.”
Agri-Pulse’s Kim Chipman reported that the “timing of the ban hits as many farmers are financially struggling in part due to high production costs, making precise application of crop protection products and fertilizers especially important. Such precision increasingly has been accomplished by using drones, also known as unmanned aerial systems (UAS).”