Sustainable soy in the Cerrado: beyond the ‘big five’

It is impossible to talk about the impacts of Brazilian soy production without talking about the Cerrado, the world’s most biodiverse savannah. The top traders exporting soy from the Cerrado, responsible for 60% of  soy exports from the region in 2015, have come under necessary pressure to do more to protect it. But our analysis demonstrates the need for increased scrutiny of the role of emergent soy traders in the region too.

Cattle and soy production are the main drivers of deforestation in the Cerrado, with over half of the soy produced in Brazil in 2013/2014 originating there. In fact rates of deforestation – which includes the loss of other important vegetation – now exceed those in the neighbouring Amazon, where efforts to combat deforestation in Brazil have previously focused.

Global Canopy’s new Company action on deforestation platform assesses the power, policies and self-reported progress of 137 companies producing and sourcing soy and cattle from South America. These assessments reveal the influence of a number of lesser-known soy traders operating in the Cerrado – and the collective exports of these traders are significant.

Who’s involved?

The so-called ‘big five’ soy traders (ADM, Amaggi, Bunge, Cargill, and Louis Dreyfus) dominate soy exports from the Cerrado.

But the next six largest traders were responsible for a significant level of exports, exporting a total of nearly four million tonnes (16%) of soy from the region in 2015, according to Trase data (SEI-PCS model version 2.2).

These six companies – Agrex, Algar Agro (shown on Trase as ABC Indústria et Comércio), Caramuru, COFCO, Granol, and Multigrain – wield significant power in the supply chain, based on their revenue, the volumes of soy they handle, their storage or processing capacity and the geographical scale of their operations.

Efforts to tackle deforestation are lagging

Our analysis shows that the efforts of these traders to tackle deforestation lag even further behind those of the big five. Just two of these companies (Algar Agro and COFCO) have signed up to the Soy Moratorium, which commits them to not source soy from land in the Amazon which has been deforested since 2008. None have a blanket zero deforestation or zero conversion policy to safeguard the other biomes in their supply chain, such as the Cerrado.

COFCO is the only trader of the six to mention land use in the Cerrado, with a commitment not to source from areas of high conservation value in the company’s Code of Conduct. This commitment does not apply to a large proportion of the remaining native vegetation in the biome which has not been classified as high conservation value.

Worryingly, several of these traders are linked to sourcing from states in Matopiba, where soy expansion into areas of native vegetation has been particularly high. Matopiba covers the Brazilian state of Tocantins and parts of Maranhão, Piauí and Bahia.  According to Trase data, the majority of the soy which Agrex, Multigrain and Algar Agro exported from the Cerrado in 2015 was sourced from the Matopiba region. This suggests that there is a high risk that the soy traded by these companies is linked to areas of soy-driven deforestation.

When it comes to investing in systems to both trace and monitor the land-use impacts of soy production, the progress of many of these companies appears similarly wanting. Only COFCO reports on their use of satellite mapping to monitor the areas from which it sources soy, and this monitoring has so far been limited to the Amazon, leaving activities in the Cerrado unchecked.

The influence of lesser-known traders has grown in the Cerrado in recent years, yet these traders have so far escaped the spotlight of civil society campaigns. The limited scope of their policies to tackle deforestation highlights a need for both closer scrutiny of traders beyond the big five and more ambitious cross-sectoral commitments to protect the region.


Article by Maria Tyldesley, Latin America Researcher at Global Canopy