“Organic” soy gains market and could even have a reference price in Chicago
19 May 2022
The data was revealed by an American expert during the Mercosoja 2022 Congress, held in Brazil. In this framework, the neighboring country explained the details of its ABC plan: Low Carbon Agriculture.
In Foz do Iguazú, Brazil, a new edition of the Mercosoja 2022 Congress is taking place. And one of the outstanding panels was that of the journalist and economist Roberta Paffaro, from the Chicago Mercantile Exchange (CME) Group, who spoke about the news and trends in the world oilseed market.
There he surprised when talking about the growth of “organic” soybeans: it has been so great that he stated that the Chicago Stock Exchange is evaluating incorporating some kind of price reference for this crop that is produced differentially (without the use of agrochemicals).
“With the pandemic, there was a very big change in terms of production and people began to pay more attention to food. Organic soybeans are growing quite a bit and are being studied on the Chicago Stock Exchange, because there is no forecast of a future contract to have a price reference,” Paffaro mentioned during his speech.
The case of the United States is a witness: in 2021, 9.1 million hectares of “organic” production of corn and soybeans were certified, which implies a growth of 123% since 2008. In addition, it indicated that the import of organic grains doubled in the last five years.
A NEW GLOBAL MARKET FOR SOY?
Will we have to produce organic soy? Will it be a new market? Paffaro asked himself these questions and the answer was: “We should look at what is happening in the United States and Europe, where it is also a trend. There is talk of food safety, sustainability with a certification and that the producer is paid for this environmental service.”
“The world is in a transition and for this reason there are many innovations and new demands emerging, and we have to see how we are going to reinvent ourselves and what we are going to receive for that. We have to find a way,” he emphasized.
THE BRAZIL EXPERIENCE
On the other hand, in line with what was expressed by Paffaro, the director of the Department of Sustainable Production and Irrigation of the Ministry of Agriculture of Brazil, Fabiana Villa Alves, recounted the details of a program that has been growing without restraint in that country: the ABC Plan (Low Carbon Agriculture).
“We have great opportunities in soybeans and meat on a sustainable basis. In 2020 we started working with low-carbon soybeans and now there are other low-carbon and carbon-neutral products such as coffee and cane, for example,” he said.
He also stressed that this initiative “is not from a government, but from the State”, because several governments have already passed and it remains firm. “The ABC Plan is the largest global sustainability policy for the agricultural sector that is being promoted by Brazil. It started in 2010 and is now in its second stage. There are 12 public policies covering sustainability”, he summarized.
From his point of view, “it is a path of no return”, because “there are 30 billion dollars available in private green funds”.
“They are shareholders and investors willing to finance to place resources in companies that have clear criteria. In soy we have reputational advantages. We show that Brazil has direct sowing, attracting green investments, mitigating risks and new opportunities, and lately, adhering to global goals and commitments”, he highlighted.
In Brazil, they have public and private protocols (organic soy, sustainable soy, low-carbon soy) and minimum compliance standards through current legislation.
He then mentioned that generating rules means developing an asset that can be carbon, water, biodiversity or sustainability, then the instrument to measure indicators, indices and what those tools are going to be made with. Thus, he made reference to the fact that in livestock they have neutral carbon leather and low carbon meat, which are a world example. Likewise, the State of Mato Grosso do Sul created a Carbon Neutral State and has shares in soybeans, meat or sugar cane.
“We have soybean production systems with different types of bio-inputs for the reduction of nitrogenous fertilizers,” he added.
NEW GOALS OF THE ABC+ PLAN
In October 2020, ABC+ was launched with new goals and revised technologies. The objectives are 72.68 million hectares, 208.40 million cubic meters of treated waste and an additional five million confined animals in intensive finishing.
30 million hectares of recovered pastures,
12.5 million hectares with well-done direct sowing,
10.10 million hectares of integrated systems with combinations,
4 million hectares of implanted forests,
13 million hectares with bio-inputs, with growth promoters, nitrogen fixers, etc.,
208.40 million effluents from treated animals,
3 million hectares of irrigation systems as great mitigators and promoters of food security,
5 million more animals with intensive termination in confinement.
These goals were built with working groups, convening researchers from Embrapa, civil society and associations. “These are feasible goals that bring challenges. Until 2030, there are one billion equivalent tons of Carbon mitigation”, explained Villa Alves.
And he concluded: “The great objective of ABC+ is to achieve more sustainable, more resilient and, therefore, more competitive agricultural systems.”