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Increased trade in agricultural products between Mercosur countries and the EU could potentially aggravate deforestation, raising questions about the compatibility of the agreement with environmental goals.
According to the Indian Centre for Science and Environment, the country’s 2022 demand for timber was 63 million cubic metres—30 million cubic metres for domestic production and 33 million cubic metres from imported sources.
Uruguay is India’s top market for sawlog, with India’s Ministry of Commerce and Industry reporting that Uruguyans account for more than 20% of total trade for the first six months of 2024 (487,700 cubic metres) ahead of Australia (14.4% or 347,600 cubic metres), Ecuador (12.1% or 293,300 cubic metres), Argentina (9.1% or 213,700 cubic metres) and the United States (7.6% or 193,000 cubic metres).
India has emerged as one of the United States’ most important export markets, with 116,000 cubic metres of softwood lumber shipped from the West Coast to India last year alone. Already its fastest-growing hardwood market, the US is capitalising on India’s construction industry and, in the process, making up for a drop in Chinese demand—with total lumber exports almost tripling for the first six months of 2024 over last year.
While import volumes remain lower in 2024 compared to 2023, India is competing with China to become the world’s largest consumer market for structural timbers. The Modi Government is grappling with a 19 million-unit housing shortage, which will double over the next five years.
Fuelling India’s demand for roundwood is a decision made in 2020 to reverse a 27-year ban on using timber in public buildings.
The Development Bank of Latin America and the Caribbean (CAF) has announced an investment of US$25 million in Timberland Investment Group’s (TIG) reforestation strategy in Latin America. TIG, a subsidiary of BTG Pactual, aims to protect and restore around 150,000 hectares of deforested natural forests in Brazil, Uruguay and Chile. The initiative also aims to create sustainable and independently certified commercial forests to improve biodiversity and support inclusive community development. In line with its mission to boost sustainable development, CAF aims to become the region’s green bank committing to allocate US$25 billion in green financing by 2026 representing an increase from 24% to 40% of total approvals.
Barclays has published new supply chain sustainability requirements for clients in forest-risk commodity sectors including beef and palm oil.
Barclay’s has added a new Forestry and Agricultural Commodities statement to its website this week. The statement stipulates that Barclays has “no appetite” to support companies directly involved in illegal forest clearance.
From the beginning of July, beef producers will not be able to undertake work in areas of the Amazon rainforest cleared or converted after 2008.
Those producing beef in South America will also need to prove that they gave deforestation-free supply chains by 2025. By the end of 2025, these firms will need to update their policy commitments on deforestation and human rights, and to monitor and report on deforestation-free product volumes.
Barclays (BARC.L) has told beef sector clients they must prevent deforestation in their South American supply chains, in a policy document seen by Reuters that toughens the bank’s stance but stops short of campaigners’ demands.
Fianna Fáil MEP, Billy Kelleher has commented on the agreement between the European Commission and European Council to block products, such a beef or cattle, from entering the EU market which are linked to deforestation, and potential impacts on South American exporters of cattle products.
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