Trase Yearbook 2020
The state of forest risk supply chains
A review of commodity deforestation and expansion, the traders and markets that dominate exports and their exposure to associated deforestation risk, and the effectiveness of zero-deforestation commitments for half of global trade in forest-risk commodities.
Cake, oil exports link EU, India to Chaco deforestation
Soy exports fell almost 50% in 2016–2018, linked to a protracted drought. However, exports from the Chaco – the frontier of soy deforestation, where much of the soy going to the European Union is sourced – remained unchanged.
There was 21,594 ha of deforestation in the Argentinian Chaco in 2018
Argentina stands out from other Latin American soy producers in that it primarily exports processed soy products – cake and oil – rather than beans. Argentina was the no. 3 exporter of soy and the no. 1 exporter of soy cake in 2018.
of soy deforestation in the Argentinian Chaco in 2018
While Argentina’s soy production and exports have increased since 2000, exports fell almost 50% between 2016 and 2018 to 27.6 million tonnes (beans, cake and oil combined ). This came amid an overall drop in Argentinian soy production from 54.8 Mt in 2017 to 34.7 Mt in 2018 linked to a protracted drought as well as a marked decrease in the area under soy crops. (The 2019 harvest increased again to 55 Mt.)
Argentina crushing capacity drives up imported soy deforestation risk in 2018See insight
Notably, however, the total soy plantation area in the Argentinian Chaco , the hotspot of soy expansion and deforestation in the country, was relatively stable through 2016–2018 (at 2.7 million hectares), as were soy exports (at 2.8–2.9 Mt) – even as the Pampas and Espinal biomes experienced large decreases in both production and exports. The dramatic decline in domestic production was somewhat offset by increased imports of soybeans from Paraguay, the USA and Brazil.
Declining deforestation in the Chaco
of deforestation risk per 1,000 tonnes of soy exports sourced in the Argentinian Chaco in 2018
The Chaco has been the main frontier of commodity-driven forest loss in Argentina in recent years. Between 2010 and 2018 the Argentinian part of the Chaco lost more than 1 million ha of native vegetation, largely due to the expansion of cattle pasture and soy. Deforestation has fallen in recent years, from 98,275 ha in 2016 to 21,594 ha in 2018, from a peak of 211,836 ha in 2013.
In 2016–2018 there was an overall decrease in soy deforestation in the Chaco, from 19,326 ha to just 4,146 ha in 2018 . However, the relative soy deforestation risk of exports from the Chaco, at 0.9 ha/kt in 2018), was only just lower than the relative deforestation risk of soy exports from the Brazilian Cerrado (1.2 ha/kt).
EU dominates exports and deforestation risk
The top 5 exporter groups accounted for 63% of export volume and 51% of linked deforestation risk in in 2018
The European Union was the biggest importer of Argentinian soy in 2016-2018, importing 6.2 Mt (or 23% of exports) in 2018 – down from 11 Mt (21%) in 2016. Due to sourcing a significant share of soy from the Chaco, the EU was exposed to 550 ha of deforestation risk.
While the EU imports soy cake, mainland China (the second largest importer) imports mainly soybeans, and India (the fifth largest importer) dominates imports of soy oil.
Highly segregated flows of Argentinian soy cake, oil and bean exportsSee insight
The supply chains of Argentina’s soy cake, soy oil and soybean exports look very different, which strongly impacts the associated deforestation risk. Therefore, while mainland China imported around 4 Mt of Argentinian soy in 2018, around 60% of the EU´s imports, its total deforestation risk exposure was just under a quarter of the EU’s. The EU’s relative deforestation risk (0.088 ha/kt) is more than double that of mainland China (0.032 ha/kt). In contrast, the 1.6 Mt of soy India imported in the form of soy oil was associated with only a slightly lower total deforestation risk than China’s imports, and India’s relative deforestation risk (0.071 ha/kt) is also much higher than mainland China's.
of soy-producing departments (4 out of 205) across Argentina accounted for more than half of soy deforestation risk in 2018
The largest traders involved in soy exports in 2016–2018 were the Argentinian companies Vicentin and Aceitera General Deheza. The “ABCD” companies that dominate soy exports from Brazil and Paraguay – ADM, Bunge, Cargill and Louis Dreyfus – were less visible, but still in the top 10 exporters. However, Vicentin filed for bankruptcy in February 2020.
Zero-deforestation commitment coverage increasing
of soy exported from Argentina was covered by a trader’s zero-deforestation commitment in 2018
Traders’ zero-deforestation commitments (ZDCs) covered 58% (15.9 Mt) of Argentinian soy exports in 2018 – 19% more than in 2017, thanks to a new commitment made by trader Louis Dreyfus and because Noble was purchased by COFCO (which has a ZDC). However, a significant share of trade with the top five export markets was not covered.
of soy deforestation risk was linked to exports covered by a zero-deforestation commitment in 2018
Looking at exports from the Chaco, ZDC coverage rose to half of exports in 2018, up from just over a third in 2016, due to new commitments by Louis Dreyfus (2018) and COFCO (2017). However, the relative deforestation risk of companies exporting from the Chaco with and without a commitment remains similar.
More information on data sources and methods .