EU deforestation rules to impact global coffee and cocoa supply chains

The European Union Deforestation Regulation (EUDR) is expected to influence global commodity supply chains beyond the European market. According to a study by the non-profit Trase, coffee companies may find it more cost-effective to apply EUDR traceability and compliance standards to their entire global supply chain rather than maintaining separate systems for EU and non-EU markets.

Major coffee players are heavily exposed to these regulations. For instance, JDE Peet’s exports 84% of its beans to the EU, while trading companies Louis Dreyfus and Neumann Gruppe export 63% and 53%, respectively. While the EU accounts for approximately 40% of global coffee imports, companies supplying the bloc represent nearly 80% of global coffee shipments.

In the cocoa sector, Brazilian production is positioning itself to meet these rising sustainability and traceability demands. Jaime Recena, CEO of ABICAB, stated that 96% of Brazil’s current cocoa production area is eligible for export to the EU. In regions like Pará, 80% of cocoa is grown on land deforested before 1998, which may assist in meeting environmental compliance through land recovery and carbon sequestration.