Forest risk commodities

Soy

The soybean is an extremely versatile commodity. It is used for vegetable oil, as a source of protein in meat and dairy substitutes, and as a hidden ingredient in many processed food products. Overwhelmingly though, it is found in livestock feed. Global demand is rising quickly, primarily driven by rising demand for feedstock in China. The majority of the increase in soy production over the past decade has been in Brazil, where soy expansion has driven deforestation in the Amazon, Atlantic Forests and the Cerrado region.

Supply

  • The major soy producing nations are the United States, Brazil and Argentina. These three countries dominate global production, accounting for 80% of the world’s supply and nearly 90% of global soybean exports in 2011. Global trade in soybeans has grown rapidly since the 1990s, primarily in response to demand from China and Europe for animal feed1. Continued rising demand is projected to raise the global soybean trade by nearly 3% annually to 104 million tonnes in 2019/20, of which Argentina, Brazil, and the United States are expected to account for approximately 88%. Brazil is projected to account for most of the growth in global soybean exports, and by 2019/20 Brazil is anticipated to approach the United States as the world's leading soybean exporter.

Demand

  • In recent years, China and countries in North Africa, the Middle East, and South Asia, with limited opportunity to expand oilseed production, have invested heavily in crushing capacity. As a result, their demand for soy has grown rapidly and this growth is projected to continue. Despite significant domestic production, China is the world’s largest importer of soy to feed its growing livestock industry and future projections see China dominating world soybean imports, accounting for an estimated 78% of the projected growth in world trade by 2019/20.
  • Soy is available in three forms: the whole soybean and its two derivatives, soybean oil and soybean meal. Much of Europe’s meat production is now dependent on soy as a feedstock - In 2011, the European Union’s 27 countries together imported more than 21 million tonnes of soybean meal, almost 11 million tonnes of soybeans (nearly all of which were also processed into feedstock on arrival) and almost half a million tonnes of soy oil. These products are mainly fed to pigs and poultry that are sold on as meat and used in multiple food products eaten by millions of people every day.
  • Population increase and economic growth in developing countries are projected to drive up demand for vegetable oils for food consumption and soybean meal for livestock production. Soybean oil for biodiesel production is also forecast to increase. Other non-food uses of soy are increasingly common, including paint, ink, wax and soy-based foam and plastic products.
  • Rising demand raises concerns for future impacts of soybean production, particularly in the Brazilian Cerrado and in forested regions of Argentina and Paraguay.

Brazil

  • Fuelled by large tracts of low cost, fertile land and lower labor costs, soybean cultivation in the Amazon has undergone a dramatic transformation over the past 12 years. During peak deforestation rates in the mid 2000’s, soybean expansion was responsible for nearly one fifth of deforestation2. In the 1980s, 90% of soy produced was grown in the US; by 2005, Brazil had become the largest exporter and the second largest producer of soybeans.
  • The majority of the increase in soy production over the past decade has been in Brazil, driving deforestation in the Amazon, Atlantic Forests and, most significantly, the Cerrado region - a global biodiversity hotspot. The majority of soybean production in the Amazon is in the hands of a few big farmers, and in some cases has been associated with negative social impacts such as land grabbing and poor working conditions.
  • NGO campaigns have highlighted the links between the soybean industry and deforestation, water pollution, global warming and slave labor.
  • In July 2006, the Brazilian Association of Vegetable Oil Industries (ABIOVE) and the Brazilian National Association of Grain Exporters (ANEC) and their members (ADM, Bunge, Cargill, and Louis Dreyfus) agreed not to trade soy from areas within the Amazon biome deforested after the date of the agreement. Since its beginning, soybean production has increased, and is still rising, while annual deforestation in the Amazon has fallen by record numbers3. In December 2012, the Moratorium was extended until January 1st 2014. The identification of soy on newly cleared land in the Amazon biome and a change in Brazil’s Forest Code were cited as reasons for the need to extend the moratorium for another year4.

Standards Setting and Third Party Certification

  • Founded in 2006, the Roundtable on Responsible Soy (RTRS) is a multi-stakeholder process with a secretariat in Argentina and a membership divided between producers, traders, financiers and civil society. The RTRS standards for responsible soy were agreed in 2009 and include requirements to halt conversion of areas with high conservation value, to promote best management practices, respect for land tenure agreements and to ensure fair working conditions. In 2011, Grupo André Maggi became the first company to be certified by the RTRS and produce the first certified soy.
  • Rainforest Alliance and The Sustainable Agriculture Network (SAN) have developed criteria for responsible farm management with the aim of improving commodity production in the tropics. The Standards comply with the Code of Good Practice for Setting Social and Environmental Accreditation and Labelling (ISEAL) Alliance.

Soy data sourced from USDA. (2012) Agricultural Projections to 2021; USDA (2012) Oilseeds: world markets and trade; USDA (2012) Soybean baseline, 2010-19

1 Foresight. The Future of Food and Farming (2011) Final Project Report. The Government Office for Science, London
2 Macedo MN, et al. (2012) Decoupling of deforestation and soy production in the southern Amazon during the late 2000s. PNAS 109, 1341-1346
3 Greenpeace. (2012) Moratória da soja chega ao sexto ano
4 USDA. (2012) Brazil: Oilseeds and products update

Global soybean production

Five year average by weight (2007-2011)
Source: USDA 2012.

Global soybean production 

Global soybean imports

Five year average by weight (2007-2011)
Source: USDA 2012.

Global soybean imports 

 
  Join the CDP LinkedIn group Follow @cdp on Twitter          Subscribe to receive our monthly newsletter
  Connect with us          Newsletter
   
 
 
  © 2014 CARBON DISCLOSURE PROJECT, Registered Charity no. 1122330.
A company limited by guarantee registered in England no. 05013650