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* Year-on-year decline in Brazil's forests a record 27%
* Conservationists still fear gains are vulnerable
* Follow-up data necessary to confirm continued trend
BRASILIA, Nov 27 (Reuters) - Brazil has something to tout at global climate change talks that began this week in Doha: destruction of the world's largest rainforest is still slowing at a record pace.
Data released Tuesday suggests destruction of Amazon woodlands has slowed to the lowest rate since monitoring began in 1988. The figures, based on Brazilian government data gathered by satellite imagery, mark the fourth straight year the overall deforestation levels have slowed.
But the data, scientists warn, must still be fleshed out by follow-up research to confirm whether the reality on the ground matches what seems to be the case from the sky, especially as loggers and farmers clear smaller but more numerous patches of woodland in efforts to evade detection.
Three of the nine Amazonian states measured in the recent data actually showed increases in deforestation. Meanwhile, scientists and environmentalists warn that changes to Brazil's environmental policies in recent years could soon begin reversing the progress.
Still, the data disclosed Tuesday runs counter to arguments by conservationists who fear that rising commodities prices are fueling greater destruction.
Deforestation of Brazil's Amazon region totaled 4,656 square kilometers (1,798 square miles) between August 2011 and July 2012, a 27 percent drop compared to the same period a year earlier, the Environment Ministry said.
Environment Minister Izabella Teixeira held up the fourth year of slowing deforestation as proof that Brazil is doing its global duty in policing the Amazon basin and curbing illegal loggers and ranchers who clear the forest with fire.
"This is the only good environmental news in the world just as the climate negotiations begin in Doha," Environment Minister Izabella Teixeira told reporters.
Brazil has almost met its target of reducing Amazon deforestation 80 percent by 2020 over 2005 levels, which would help the South American country reach its voluntary goal of cutting greenhouse gas emissions by at least 36 percent below business-as-usual levels by 2020.
Deforestation accounts for about 60 percent of Brazil's greenhouse gas emissions because forests are usually cleared by fires that release large quantities of CO2 into the atmosphere.
Almost 200 nations are meeting in Doha, Qatar to try to negotiate an extension to the expiring Kyoto climate treaty and work on a new agreement to curb the greenhouse gas emissions scientists say are warming the planet, raising sea levels and disrupting weather patterns.
Brazil wants rich developed nations to pledge more ambitious cuts in greenhouse gas emissions - ideally by 25-40 percent from 1990 levels by 2020 - because they have a greater historic responsibility for climate change.
"We can show in Doha that we are doing our part in reducing emissions. The world must urgently find a definite solution for the global climate change issue," Teixeira said.
With global grain and beef prices on the rise after severe drought over the South American and U.S. grain belts in the past year, Brazilian soybean farmers are expanding at the highest rate since 2003, while Brazil's commercial cattle herd has grown to a record of nearly 210 million head.
The country is already the world's largest beef exporter and is set to overtake the United States as the world's largest soy producer this season.
Environmentalists have long blamed farming pressures as the root causes of Amazon deforestation.
"Under greater government and food industry oversight, Brazilian soy farming and cattle ranching is becoming more sustainable," Holly Gibbs, head of the Center for Sustainability and the Global Environment at the University of Wisconsin, said.
Gibbs' team keeps tabs on commitments by large multinational grain traders such as Cargill, ADM, Bunge and Louis Dreyfus as well as large beef processors to not buy soy or cattle from illegally deforested lands in Brazil.
Since 2006, major players in Brazil's soy industry have adhered to a mutually agreed upon moratorium on purchases of soy produced on newly deforested land in the Amazon rainforest.
But the drop in deforestation and the rise in planted areas for grains raises the question of where the additional farm land is coming from.
"With the high price of grains, we see producers moving increasingly into marginal areas such as degraded pasture and unused fields," said Daniel Pereira at Lanworth, which produces crop forecasts around the globe based on satellite images correlated against field data.
While government officials agree high prices for soy and beef, plus a weaker Brazilian currency against the dollar, spurred deforestation to a peak in 2004, they say enforcement has improved greatly with satellite technology.
Teixeira said a new satellite to be launched next year will allow Brazil's environmental agency IBAMA to track loggers who have turned to smaller forest areas to avoid detection.