EU soybean meal and oil buyers show no appetite for paying sustainability linked premium
That is a sizeable reduction from the 14% reached in 2020, and it means the gap between the amounts of soybeans processed and the soy products sold as verified or certified by EU crushing companies has increased from 29 to 35% points, found a FEDIOL report.
The data once again confirms the difficulty EU crushers encounter in selling such soy, said the EU protein meal and vegetable oil organization.
“The vast majority of customers are not willing to buy soy products meeting sustainability criteria, including no-deforestation criteria, if it entails having to pay a premium. In this case, crushers sell the soy product as standard, although it is verified or certified, and have to cover for the premium paid for the soybeans to their suppliers themselves.”
It is the second year FEDIOL has released the outcome of its monitoring of 'responsible' soybean sales, which is informed by data collected from its member companies.
The exercise involves assessing the volumes of soybeans bought that are compliant with FEFAC Soy Sourcing Guidelines (SSGs) and capturing the products thereof sold as 'responsible' soybean meal or soybean oil in the EU by its membership.
According to the survey, EU crushing companies bought 14,366,000 tons of soybeans, a level that was in the range of the 2020 figures. The share of soybeans sourced as 'responsible' within that tonnage was 42%, again pretty much on par with the quantities recorded in the year prior.
Deforestation risk
FEDIOL also evaluated the soybean sourcing of member companies based on their geographical knowledge of the origin of their supplies and the collection of their aggregated volumes of soybeans processed in the EU.
For the purpose of its latest assessment, it outlined how soybeans associated with a low risk of deforestation - even if not all supplies may be verified or certified - cover the EU, Ukraine, US, Canada, Brazilian soybeans under the Amazon moratorium or under valid sustainability/no-deforestation certification, and those of Argentina origin outside the Gran Chaco area.
In 2021, the data showed that 79% of the soybeans processed in the EU was sourced from areas and regions with a low risk of deforestation, hence 21% from regions with high deforestation risk yet with active engagement to reach deforestation-free sourcing, said the industry representatives.
For EU soybean crushers, the geographical area from which to source soybeans is seasonal, stressed FEDIOL. "Northern and Southern hemisphere alternate as new harvests arise. Availability and price determine the most economically viable option. Soybeans can be sourced from areas where the risk of deforestation is higher, in which case more efforts are implemented to provide evidence that the supplies are not associated with deforestation."
