Useful report & infographics on palm oil, beef, leather and soy supply chains

Chatham House have a new report, just out, titled: “Agricultural Commodity Supply Chains, Trade, Consumption and Deforestation

As with past publications by the think-tank, this report has some helpful insights within, and some great facts and figures one can make use of in a business.

The report is here, and the summary is below. The infographics underneath are useful too, on Palm OilSoy, and Beef and Leather.

At Innovation Forum, we’ll debate a lot of this on April 6-7 in Washington D.C. Details here. More than 100 large companies have confirmed to attend already.

Our smallholder farmer conference on business engagement with smallholders also seems relevant to this post. That will be in London on March 22-23 and again, lots of big companies are signing up. Details here.

Summary: (bolding is mine to enable readability)

  •   Clearance of forests for agriculture is a major cause of deforestation worldwide; the three most significant commodities in this regard are palm oil, soy and beef, which between them accounted for an estimated 76 per cent of the deforestation associated with agriculture in 1990–2008. International markets are an important driver of demand, particularly for palm oil and soy.
  •   Global production of palm oil has grown strongly for several decades, more than doubling over the period 2000–13. Oil palm has a much higher yield than do other oilseeds, and palm oil is extremely versatile, being used in a huge range of processed foods, cosmetics, detergents and many industrial applications; it is also used for biofuels.
  •   Indonesia and Malaysia between them account for more than 80 per cent of palm oil production, and are likely to continue to dominate world exports. The European Union (EU), India and China are the main consumers, importing almost 60 per cent of the market; EU demand is driven significantly by biofuel policy, while India and China use palm oil mainly as a cooking oil and in processed foods.
  •   Global production of soybeans has roughly doubled since 2000, and the expansion of output has been particularly rapid in South America; Brazil and Argentina accounted for almost 50 per cent of global production in 2013. Overwhelmingly the main importer is China (which imported 43 per cent of all soy traded internationally in 2014), mainly for animal feed for its growing meat industry. The EU is the second largest importer, using soy for animal feed and biofuel.
  •   In contrast, consumption and production of beef has grown only slowly. Major producers are the US, Brazil, the EU and China; principal exporters are Brazil, India, Australia and the US. The US and the EU are still major consumers, although – as in most developed countries – consumption is falling slightly; other significant consumers include Brazil, India, Pakistan and China. Russia and Japan are also significant importers.
  •   Three main factors underlie the growth in both consumption and production of palm oil and soy: population growth; changing dietary preferences; and policy support for biofuels. The first two are just as relevant to beef.
  •   Continued growth in world population and the expansion of the global middle class, with accompanying higher consumption levels of processed food and meat, will continue to drive demand upwards – strongly for palm oil and soy, more weakly for beef. The sharp decline in international commodities prices since 2011 may slow down the rate of expansion but does not alter these fundamentals. Given the difficulty of increasing yields, particularly in developing countries, the further expansion of agricultural land into forest areas is inevitable.
  •   None the less, three other factors may restrict this growth: the private-sector commitments and government policies that are being developed with the aim of decoupling agricultural production from deforestation; a loss of support for biofuels, most notably in the EU; and health concerns, particularly over the consumption of palm oil and beef.

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