Abstract

The objective of this research was to identify whether the majors of the soybean production chain in Brazil have conditions to design their market power and capture part of the economic surplus farmers? In this context, based on the analysis of price elasticity, drawn from the postulates of neoclassical microeconomic theory, it was found that exports of soybeans and soybean meal are inelastic to price. Therefore, companies are able to exercise their market power, mainly because they are protected by barriers to entry. In contrast, exports of soybean oil are price elastic and therefore, the soybean industry tends to seek profit on transactions with farmers to improve their competitiveness in the soybean oil segment. As a result, the Brazilian government should use mechanisms of economic policy to foster competition in the market.

Key words: Soybean supply chain, agribusiness, market structure, export function, price elasticity.