The Yearbook, prepared by Trase leads SEI and Global Canopy, showcases the latest insights from Trase’s unique data on the dynamics and sustainability in the supply chains of major forest-risk commodities coming from South America, with the help of state-of-the-art data visualizations. It is a new milestone in the development of the supply chain transparency platform launched at the end of 2016 at the Marrakesh COP.

Soy harvesting in Mato Grosso state, Brazil. Photo: istock / alffoto.

This first Trase Yearbook pulls together key findings from Trase data and analysis to present the most comprehensive picture of the supply chains of one of the major commodities driving tropical deforestation and habitat loss in South America: soy.

Of all agricultural commodities linked to substantial deforestation in the tropics, soy is the most internationally traded. In 2018, Brazil is poised to overtake the USA to become the world’s leading exporter of soy.

Trase Yearbook 2018 highlights the role of global soy demand in driving significant deforestation (including conversion of savannah and other natural vegetation) in parts of the Cerrado, particularly the newest soy frontier region, known as Matopiba, where 37% of the expansion of soy cropland between 2005 and 2016 was into newly deforested areas.

China is by far the biggest importer of soy grown in the Cerrado. It was the destination of some 60% of total Brazilian soy exports in 2016, and its sourcing patterns exposed it to more than half of the total soy-related deforestation in Brazil in that year. But as the Yearbook also shows, some key European markets are also importing large quantities of soy. In the process, these EU members are exposing themselves to a substantial risk of being associated with deforestation, despite signing the 2015 Amsterdam Declaration pledging to aim for zero-deforestation supply chains. Matopiba is also seeing the emergence of new “giant” traders challenging the dominance of more established players.

This graphic from Trase Yearbook 2018 shows how major Brazilian soy traders have targeted the growing Chinese market. It shows changes in the proportion of exports of Brazilian soy by large traders going to China, between 2005 and 2017. Traders are ranked left to right by the proportion of their total export volume going to China in 2017.

Toby Gardner, Trase lead and Senior Research Fellow at the Stockholm Environment Institute, said: “By identifying the sourcing patterns for specific traders and consumer markets for the whole of Brazil’s soy exports, Trase provides a powerful way of understanding the risks in commodity supply chains. It allows us to see which supply chains are linked to problems such as deforestation, and to identify opportunities to improve the sustainability of commodity production. This is crucial information for companies and governments wanting to improve supply chain sustainability, and meet zero-deforestation commitments.”

Trase Yearbook 2018 provides a first systematic assessment of:

  • sourcing patterns of major soy-buying companies and countries;
  • the deforestation risk exposure of the major companies that dominate Brazil’s soy exports;
  • the deforestation risk exposure of major consumer markets for Brazilian soy, including the EU and China.

The final chapter of the Yearbook looks at the progress of zero-deforestation commitments related to Brazilian soy supply chains. It compares the sourcing patterns of committed and non-committed actors, and their resulting exposure to deforestation risk.

Comparison of the relative deforestation risk associated with Brazilian soy exports by traders with and without a zero-deforestation commitments, Amazon and Cerrado, 2006–2016

Putting numbers on deforestation risk exposure

Key to the analysis in the Yearbook´s assessment of supply chain sustainability are Trase “deforestation risk” indicators. These leverage Trase’s unique supply chain transparency data to show how far traders, importers and consumer markets are potentially connected to deforestation and other clearance of ecologically sensitive habitats in their South American supply chains.

Arnaldo Carneiro Filho, Head of the Sustainable Supply Chain Programme and Trase lead at Global Canopy, said, “Soy is an important sector for the Brazilian economy, and an important source of animal feed, but the need for agricultural land must be balanced with the need to retain critical forest and savannah habitats. The commitments made by some companies and countries are encouraging and reflect their awareness of the problem. Opportunities for sustainable production are there to be taken, and the public and private sectors need to work together to take advantage of them.”

Some 10 million hectares of land is expected to be converted to soy in the next decade in Brazil, and much of this is likely to be in the Cerrado. Trase data and analysis, like that showcased in the Yearbook, can help companies, countries, civil society and consumers work together to ensure that South America’s remaining natural biomes are not lost in the process.