The wave of defaults that swept the farms of Brazil, the main producer of grain, became a headache for global traders, who are their main creditors, and created problems with the widespread use of barter.

In battles in bankruptcy courts in the main agricultural state of Matu Groma, farmers are confronted with international trading houses such as the French Louis Dreyfus Corp (LDC) and US-based company Bunge Ltd, which actively lend to producers through Brazil's unique barter system to protect profit margins from new Chinese traders.

The scale of the bankruptcy of Brazilian farmers is very far from the plight of their American counterparts, who recently struggled with extreme weather and a trade war with China.

Nevertheless, well-known cases indicate that in Brazil there are risks of poor farm management, a weak economy and a controversial bankruptcy code, which creates problems for traders, despite the soy boom caused by trade and economic tensions between the U.S. and China.

Merchants found themselves at a standstill when they discovered that farmers to whom they provide loans as private individuals can often apply for bankruptcy protection, even if they were corporations, making it difficult to return millions of soy dollars under the contract.

Judini de Souza, executive director of Amaggi, Brazil's largest state trader, said the recent wave of farmer bankruptcies in Mato Grosso is “a cause for concern.”