The bears louder than the bulls as companies prepare for EU deforestation regulation
With less than sixty weeks to go before the EU deforestation regulation comes into force, it’s pretty much the only topic of discussion between commodity-importing companies.
The company "bears" were holding forth on every panel at a recent commodities conference in Amsterdam.
One palm oil trader and long-standing buyer from small farms said that they will source palm oil primarily from plantations for EU supply as the risk of non-compliance from most smallholder farmers is too great.
A major coffee roaster speculated that many smaller companies will not be able to stay in business because of the new data verification wall being built around Europe’s port.
One speaker expressed the frustration of many at the poor preparedness of the customs authorities in Europe: “If I don’t comply perfectly with your requirements, we have a financial liability of up to 4% of our European turnover, and yet you say "it’s too technical" for you when we want to discuss the details of compliance.”
But in the coffee breaks and the corridors, there was another voice, the quiet opinion of business "bulls" who don’t want a public argument but are relishing the prospect of the regulation.
One high-profile chocolate company talked about the promise of “the end of indirect supply”, where most of the social and deforestation challenges to the cocoa sector lie.
A big coffee roaster talked excitedly about finally having the tools to break the link between coffee and deforestation and the relief of having the full attention of producer governments on the issue.
I heard similar stories from forest campaigners who report that EUDR is having a wonderful galvanising effect on the forest protection actions of the rubber sector.
It is possible to align these