October 20, 2020

Five companies dominate global trade in deforestation-causing goods

Some five companies dominate up to 70% of global trade in basic agricultural products, such as soy, beef and palm oil, responsible for deforestation in countries such as Brazil, Paraguay, Argentina and Indonesia, reveals a report released Thursday.

The Trase 2020 Yearbook, produced by the Trase Study Center in association with Global Canopy, determines, through data analysis, the sustainability of agricultural supply chains and their impact on deforestation, in order to help companies and Governments to improve their practices.

The report reveals that, in the case of soy, the companies called “ABCD” -ADM, Bunge, Cargill and Louis Dreyfus- and the Chinese state-owned COFCO are the top five soy exporters in Brazil and responsible for more than half of the trade of this product from Brazil, Argentina and Paraguay combined in 2018.

Regarding Paraguay, the authors point out that in 2018 about 90% of beef exports were handled by five firms: Minerva, Frigorífico Concepción and the Mennonite Cooperatives of Fernheim; Chortitzer and Neuland.

The researchers note that the fact that commodity exports are concentrated in a few hands should make it easier to take precautions to reduce deforestation and other harm to the environment.

The 2020 Yearbook denounces that the commitments made by countries and companies for “zero deforestation”, for example with the signing of the New York Declaration on Forests, have not had a “significant” effect in reducing deforestation in their chains of supply.

“Companies with acquired commitments are not acting better in reducing deforestation from raw materials than those without,” the authors state.

As an example, they indicate that in La Palma oil sector in Indonesia there are many transparency commitments, but little improvement is seen because “it is difficult to link companies with the deforestation that is taking place” because many of the producers are small farmers.

Despite its “strong commitments” to end this problem, “in the last decade soybeans exported to Europe have been more damaging, per ton, to forests and climate than soybeans exported to China,” states the Yearbook.

He explains that although the European Union (EU) exports less soy than China, its imports, due to their origin, “are linked to more deforestation per ton”, and the same is true of soy imported from Argentina.

In the case of Brazilian beef, it is Chinese imports that are associated with higher deforestation in that country, which is the world’s leading exporter of beef.

The creation of new pastures for livestock is precisely the first factor of deforestation in the tropics and affects above all the Amazon and Cerrado in Brazil and also the Gran Chaco in Paraguay, also threatened by soybean crops, the report says.

It also points out that the export of live cattle from Brazil to the Muslim “halal” market in the Middle East is linked to deforestation five times greater than that related to the export of fresh meat.

In another section, the analysis reveals that the carbon footprint of soy imports to Spain, the largest European consumer of basic products, is, per ton, six times greater than that of China, globally the largest buyer of soy, meat of beef and palm oil produced in the tropics.

This is explained because, when the raw materials come from recently deforested areas, their carbon footprint can increase up to ten times, the authors maintain.


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