The trade in agricultural commodities is a backbone of the global economy but is a major cause of negative social and environmental impacts, not least deforestation. Commodity traders are key actors in efforts to eliminate deforestation – they are active in the regions where commodities are produced and represent a “pinch point” in global trade that provides a powerful lever for change. However, the procurement strategies of traders remain opaque.
This article catalogues traders’ sourcing across four sectors with high rates of commodity-driven deforestation: Brazilian live cattle exports, cocoa from Côte d’Ivoire, Indonesian palm oil and South American soy.
The authors show that traders often source more than 40% of commodities “indirectly” via local intermediaries and that indirect sourcing is a major blind spot for sustainable sourcing initiatives. To eliminate deforestation, indirect sourcing must be included in sectoral initiatives and landscape or jurisdictional approaches, which internalize indirect sourcing, must be scaled up.