dollar was possible, US ethanol exports moved at an annualized
rate of 800m/gallons and they continue to see international
markets develop and identify ethanol as the most sustainable/low
cost alternative to replace 6bn/gallons of methyl tertiary-butyl
ether (MTBE) capacity. Regarding E15 and higher blends —
ADM believes that USDA investment combined with the ethanol
industry’s efforts will ensure they play a more meaningful role
possibly by 2017 or 2018.
DECLINE IN FOOD PRICES AFFECTING ALL MEAT CATEGORIES
The FAO meat price index averaged over 174 points in July,
above June but down from 183 points in January, and, well below
2014 values; the decline affecting all categories of meat.
International prices of beef moved up, offsetting a decline for pig
and sheep meat, while poultry quotations remained stable.
Prices of beef from Australia, in particular, rose, supported by
stronger import demand from the US, Japan and the Republic of
Korea, amongst others. Muted domestic demand for pig meat in
some EU member states caused quotations to fall, with export
prices following suit.
GLOBAL MEAT PRODUCTION DRIVEN BY PIG AND POULTRY IS
FORECAST TO EXPAND IN 2016
Global meat production is forecast to expand in 2015 to 319mt
(beef 68mt, poultry 112mt, pig 119mt sheep14mt), 8mt up on
last year, with the largest increases expected in China, the EU,
US and Brazil, and mostly driven by pig and poultry meat.
Government support policies are anticipated to boost pig meat
output in China to 58mt, almost half of the world total, with
similar growth rates forecast for Vietnam, Philippines and
Indonesia; while the US, Japan and the Republic of Korea are set
to recover following last year’s outbreaks of porcine endemic
diarrhoea (PED), which reduced piglet numbers. Brazil, Canada
and Mexico, are set to increase output, due to lower feed costs.
Steady growth is also anticipated for Mexico, underpinned by
improved genetics and productivity with further expansion in the
EU. In the Russian Federation, government policies favouring
large-scale farms resulted in a doubling of production over the
decade, and likely to increase in 2015, following the ban imposed
last year, on pork imports from the EU and Canada that
previously provided two-thirds of Russian imports.
RUSSIA EXTENDS ONE YEAR BAN ON FOODSTUFFS TO 2016
Trade is predicted to slow to over 31mt in 2015, constrained by
limited export supplies and subdued import demand — while
growth is forecast for beef, pigs and poultry, it is reduced for
sheep meat. For beef, much of the 2015 expansion in trade is
likely to be met by India and Brazil. Russia extended the ban on
food imports of meat, fruit, vegetables, fish, milk and dairy, worth
$9bn from the US, EU, Australia Canada and Norway, to 2016.
LARGE SUPPLIES AND REAL DEPRECIATION MAKE BRAZIL
CHEAPEST SOURCE OF CORN
Quotes for corn from all origins are down, generally touching
five-year lows — US corn quotes dropped over $30/t to $170/t
on generally favourable growing conditions, a stronger dollar, and
competition from large South American supplies. Argentine and
Brazilian quotes — helped by a near 23% drop in the value of
the Brazilian real, making Brazil the cheapest source of corn —
both origins maintaining a discount to US prices. South Korea's
Feed Leaders Committee (FLC) purchased 60,000/t yellow corn
to be sourced from optional origins in a tender for up to
140,000/t (13 August). The corn was purchased at $187.50/t C&F for arrival on 16 February, plus a $1.50/t surcharge for
additional port unloading. Corn futures improved over the
week, with buying tied to ideas that the US corn yield will turn
out significantly lower than the USDA estimate — CBOT
December contract closed at $3.77/bu ($148.44) (18 August).
GLOBAL BARLEY CROP LOWER BUT FEED USE LOWER
Smaller harvest is expected in the EU 57mt, Russia 17mt, Canada
7mt, partially offset by larger harvests in Argentina 3mt, Australia
9mt Morocco 4mt and Turkey 7mt with output forecast at
139mt down over 1mt from last year. Feed use is forecast lower
at 94mt, with trade forecast down to 25mt; China due to
imports of competing feed ingredients are lower at 7mt, and Iran
1.5mt due to better harvests, while Saudi Arabia imports are
forecast to rise to 7mt. Like other feed grains, barley values are
lower than last year — quotes for French barley FOB Rouen
($177/t-Aug 18); UK Feed Barley Merchant Nov £94–104/t
CHINA’S SORGHUM IMPORTS EXPECTED TO RISE TO 11MT IN
An increase in the planted area for sorghum, and better crops in
the US 13mt, Mexico 8mt, India 5.5mt, Argentina 4.5mt and
Australia 2.1mt, boost global output to 69mt over 6mt up on
last year. Rising feed/food/industry demand, notably in China,
Mexico, India and the US, to increase consumption to 68mt, with
global trade up by 3mt to 14mt reflecting rising imports, mostly
feed forecast at 11mt for China-US sorghum-October delivery
FOB Nola $217.72/t (13 August).
USDA SOY CROP FORECAST WELL ABOVE MARKET
Despite weather concerns, USDA raised its forecast for both the
area and yield for US soybeans, to well above what markets
were anticipating, lifting global output of soybeans to a record
320mt. Following the report, CBOT soybean futures
(November) contract fell from a high of $9.76/bu to close at
$9.10/bu (12 August). Since then, reports on the developing
crop remain upbeat and together with concerns about future
exports to China, weigh heavily on prices. CBOT soybean
futures (Nov) contract futures closed lower at $8.935/bu
($328.27/t — 19 August).
RECORD SOYBEAN CROP BUT OUTPUT FOR RAPE, SUNFLOWER
AND COTTON LOWER
Record crop for soybean 320mt, and better crops for groundnut
41mt, palm kernel 17mt and copra 6mt, are partially offset by areduced crop of rapeseed 65mt — due to reduced crops in Canada,
Australia, the EU, Belarus, and Ukraine; and smaller crops for sunflower 39mt and cottonseed 41mt. Oilseed production is forecast to fall to 529mt in
2015/16, 8mt below last year’s exceptional harvest but still the second largest crop on record; global crush is expected to increase to 446mt driven by soybean demand, with greater uptake of oil-meals up 10mt to 297mt, mostly reflecting rising protein demand in China, and in a number of other countries. Global trade in oilseeds is forecast to rise by 1mt to 145mt with oilseed stocks expected to close higher at 96mt; reflecting ample stocks
of soybeans while other oilseed stocks are tighter-rapeseed
stocks are halved close to just over 3mt, sunflowerseed under
2mt and cottonseed 1mt.
ROBUST SUPPLIES AND A DEPRECIATING REAL LIFT SOUTH
AMERICAN SOY EXPORTS
With large soy crops for the US 107mt and South America
(Brazil 97mt and Argentina 57mt), global soybean trade is
forecast to rise to 127mt, up on last year, as record South
American supplies, lower prices and tighter supplies for rape and
sunseed, may spur additional sales, with significant increases in
sales to China, the EU, and Iran anticipated. The US expects a
slow start to the season — strong competition from record
South American supplies and a significant weakening of the
Brazilian real are contributing to the sluggish pace of exports.
Global soybean stocks are forecast to fall by 6mt to 80mt
reflecting strong growth in protein meal for animal feed and
vegetable oil consumption. USDA forecast the US season
average farm price for soybeans at $9.15/bu ($336.17/t).
RISING DEMAND FOR PORK TO DRIVE SOYMEAL CONSUMPTION
China — the world’s largest importer of soybeans — is
expected to import 79mt of soybeans, with domestic soybean
crush forecast at 80mt 2015/16, in response to high demand for
soymeal from China’s huge domestic pork industry, and
supported by rising pig-meat prices, which year-on-year, rose by
16.7%. According to Shanghai-based analysis group JCI
Consulting, the average profit margin for hog producers, having
recovered to break-even in June, doubled from 400 yuan per
head, to 800 yuan per head, in the week to 24 July. The USDA
bureau in Beijing confirmed that protein meal demand continues
to be driven by growing animal producing capacity, scale animal
farming and use of industry feed; with rising demand for pork at
3.3% a year for the next decade, to underpin demand for feed,
given the government’s high priority for domestic animal
UNEXPECTED YUAN DEVALUATION CREATES UNCERTAINTY
Although strong demand for livestock feed from China's swine
sector suggests the appetite for soybeans will persist, the
uncertainty caused by the unexpected devaluation of the
Chinese yuan that began on 11 August, stunned global financial
markets and has had a significant impact on a large number of
countries and their currencies, as they digest the implications.
For commodity processors, before the yuan devaluation
Wilmar chairman and chief executive Kuok Khoon Hong said
the group “expects crushing margins in China to remain positive
for the rest of the year”. This view is shared with US-based
oilseed processor Bunge which forecast Chinese soybean crush
margins for the second half of 2015 at $15/t, down from the
$30/t enjoyed in the first half a year, and better than the very
narrow or negative margins seen last year. However, some
traders post devaluation, forecast a significant cut in crush-
margins and expect imports to slow until the uncertainty
surrounding devaluation becomes clearer.
Indian government hopes to barter sugar surplus ‘a non-starter’ say experts
The Indian government put its foot in its mouth when recently it suggested that the crisis in the country’s sugar industry would be mitigated to a large extent by exporting 4mt (million tonnes) of sugar by way of barter trade, writes Kunal Bose. India is highly dependent on imports of petroleum, edible oils and pulses, while at the current sugar season ending in September, the country will have an inventory of around 11mt of the sweetener. At the start of the new season, the required inventory is about 7mt to meet local demand till cane crushing picks up. All this must have led New Delhi to believe that by way of barter transactions, the sugar industry could be relieved of mountains of surplus haemorrhaging all cane crushing factories across the country. The crisis in the industry is so deep that factories are as a matter defaulting in making payments to cane growers. At one point in the current season (October to September) unpaid cane bills amounted to nearly $3.5bn. Delays in settling cane bills are leading a growing number of growers, unable to meet their financial and social commitments, to commit suicide. As it
would happen, the government instead of finding a permanent
solution to the crisis that periodically visits the industry offers
palliatives in the form of loans to factories which in many
instances could not be availed because of conditions.
“Sugar has been in a free fall because of
global surplus. At New York ICE futures, sugar is done at around 10.50 cents a pound, a six-year low. In the medium term,
there is unlikely to be a trigger to give a boost to sugar prices. The International Sugar Organization (ISO) has revised global
surplus for 2014/15 to 3.33mt from the earlier 2.22mt. What will continue to impact the market bearishly is the 25mt
accretion in global sugar inventory in the
past five years. Even if there is going to be a deficit of 2.49mt in 2015/16, the market will remain amply supplied because of the
inventory,” says Om Prakash Dhanuka, a
senior Indian industry official. Abundant
availability of sugar at prices which do not
cover its production costs, particularly in
India where cane prices in many growing
states are arbitrarily decided to win favours of large community of farmers but without
any consideration at what rates the sweetener is sold, does not make barter work.
“Why should any country with exportable surpluses of much
better marketable commodities at this time be ready to
exchange these for sugar that may not have found price bottom
as yet?” asks Dhanuka. Grains trade expert Tejinder Narang is
on the same page as Dhanuka. Narang says “sugar is largely
traded among private parties based on criticality of international
parities. Induction of two governments, their official agencies,
banks with escrow accounts, etc, to facilitate barter in export
process and involving non-sugar related private/public entities... is
the best way to abort sugar export.” No wonder using barter
to sell as much 4mt of sugar has proved to be a non-starter,
causing much embarrassment to New Delhi.
Besides the proposed export medium barter, where New
Delhi has also gone wrong is not to spell out that the
government will pay for the “difference in sugar production costs
and export price.” Naturally the industry, which continues to
delve deeper in the red, has remained demonstrably
unenthusiastic about bartering sugar for other commodities in
the absence of government commitment to underwrite losses.
What then is the way out of the crisis? Dhanuka says,“export
we must. The country’s outlook for other crops in the current
season (July to June) remains a cause for concern. But we are
destined to have bumper sugar production in the season
beginning October to make it sixth year in a row. Looking at
the standing crop across the country, my own estimate is we can
have record production of 29mt in 2015/16 with a season
opening inventory of 11mt. Unless we are able to export 4mt
to 5mt, for which government support is sorely needed, the
domestic market will remain in the dumps.”
Analysts are in agreement with Dhanuka, a former president
of Indian Sugar Mills Association, that the only way to export is
for government trading agencies like STC and MMTC to lift
sugar from factories at cost price and then sell it in the world
market. This was done in the past with success. To the extent
exports happen this way, factory capacity to settle cane bills in
time will improve. Interestingly, in spite of factories not settling
cane bills in time, growers are not bearing grudges against the
industry.Their wrath is rightly directed against the government.
This is evident from joint demonstrations by factories and
farmers held in New Delhi in more than one occasion protesting against government inaction.
Om PraDIFFICULT MONSOON ONCE AGAIN
More than half of the country’s farmland
being dependent on rains, the nearly 10%
deficit in monsoon rains between June and
third week of August is to hit hard at least
four states, namely, Bihar, Karnataka,
Maharashtra and Uttar Pradesh and five
crops jowar, soybean, tur, maize and cotton,
unless the monsoon gains in momentum in
later weeks. To be precise, the share of
irrigated area as a percentage of the
country’s cropped land is 46.9%. But then in
Maharashtra, a major cotton and sugarcane
growing state, only 18.7% of farmland has
the benefit of irrigation and in Karnataka
34.3%. The skewed distribution of irrigation
facilities comes to light with 76.7% cropped
area in Uttar Pradesh being irrigation
covered and 67.4% in Bihar. But then rivers,
canals and reservoirs must get filled by monsoon rains.
India’s crucial southwest monsoon starts in June and ends in September. The four states mentioned earlier that stand to
suffer the most from deficit monsoon accounts for 34% of the
country’s grain production in a normal season while jowar,
soybean, tur and maize constitute 26% of total grain and oilseed
The monsoon’s erratic and poor progress this year clouding
farm output prospects comes on the back of 5.5% setback in
foodgrain production during 2014/15 to 251.12mt from the
previous year’s record 265.04mt. A monsoon deficit of 12% and
unseasonal rains and hailstorms causing large-scale damage to
standing wheat and other crops in northern Indian states were
the reasons for last season’s farm production fall. From rice to
wheat to coarse cereals to pulses to oilseeds almost every crop
took a hit last year.
The biggest summer crop that southwest monsoon supports
is rice, which is the staple food for millions of Indians. As it
would happen, the two major rice growing states West Bengal
and Orissa have fallen victims to floods and drought, respectively.
A survey by the Financial Express says while “widespread damage”
has been caused by heavy rains and floods in five of 20 districts
of West Bengal, including rice bowl Burdwan, Orissa where six of
30 districts have experienced 40% monsoon deficit is facing “a
drought like situation.” The country’s foreign trade relating to
food items will see radical changes in case farm output suffers a
major setback. Like imports of edible oils and pulses will rise and
the government will be careful in sanctioning exports of rice and
wheat but not basmati rice.What, however, defies logic is the
government imposing a 10% import duty on wheat when there
is a question mark on domestic production of the cereal.The
duty has upset flour mills which traditionally import high quality
New Delhi is not rushing to make a crop forecast for
2015/16 awaiting outcome of the winter crop season
(November to March) when wheat and the second rice crop are
grown. But taking note of a “drier than average monsoon
although rainfall was not as low as feared at the start of the
season,” global credit assessor Moody’s Investors Services has
cut its India growth forecast for 2015/16 by half a percentage
point to 7%. Domestic rating agency CRISIL, however, says India’s GDP growth this financial year will
be 7.4% with the farm sector growing
1.5% on a weak base of last fiscal when
foodgrain production slipped 5.5%.
CRISIL says “any positive surprise on
rainfall over the next 45 days can create
some upside to our growth outlook.” A
benign surprise is, however, highly unlikely
since India Meteorological Department
thinks the behaviour of rains in the
second half will be worse than in the first
CRISIL chief economist Dharmakirti Joshi says,“India has suffered weather related turbulences for years. What is worrying is that with rising frequency of
such events, the impact is getting increasingly amplified because holistic efforts to reduce structural vulnerabilities are lacking. We believe investing in Indian agriculture’s future has become economically and politically critical.” The agency says like last year, New Delhi may be able
to limit food inflation this time too. But doing that year after
year will be an impossible task. The country’s farm sector must
be made resilient through adequate investment and injection of appropriate technologies. For an estimated 833m people out of
the country’s total population of over 1.2bn depend on
agriculture for their livelihood. The sector has nearly 14% share
of India’s GDP.
After boom of last decade, Brazil soya planting set to be less than last year
Was the period during which the output of soya, maize and other grains in Brazil grew by more than 2% year on year, doubling in a decade, prove to be a one off, and will output stagnate from now on? asks Patrick Knight.
The past decade has been one of extraordinary success for the production and export of Brazil’s two principal grains, soya and maize. The amount of soya beans produced has increased from 54mt (million tonnes) in 2006 to almost 100mt this year, while the output of maize has risen from 42mt to almost 85mt in the same time. The amount of both types of grain used in Brazil itself has risen much more modestly, so most of the extra being produced can be exported.
But after a period during which grains prices rose steadily in response to surging demand, which encouraged farmers in Brazil to expand plantings in parts of the country further from ports than those in the south, prices have fallen sharply in the past three years. They seem unlikely to rise again any time soon, while costs, notably of transport, but also fertilizer, have increased sharply. Some overstretched farmers in the centre west are already facing financial difficulties, and some are having to reduce plantings.
Any increase in the amount of grains used in Brazil itself is explained mainly by a steady rise in the production of poultry meat, of which Brazil is now the world’s leading exporter. The steady increase in the amount of soya oil blended with mineral diesel fuel, used mainly to power Brazil’s huge fleet of trucks, is also of growing importance. Many of these trucks are used to carry grains and oilseeds long distances from fields and processing plants to the ports or railheads, as well as to a new generation of river terminals now being built.
One of the main motors for the increase, at least for soya, has been the steady increase in demand from China. China once prided itself on being self-sufficient in food, but it is now unable to produce enough to cope with the fast-growing demand for
meat and dairy produce, and the grains needed to produce them.
Large quantities of maize have only begun to be exported
from Brazil in the past five years. Before then, Brazil frequently
imported substantial quantities of this grain from neighbours, or
from further afield. Brazilian maize is now exported to
numerous countries in the Middle East, notably Iran, as well as to
several in Asia, notably Korea. For the time being at least, none
goes to China, but this may well change.
The area planted to soya as a main,‘summer’ crop in the
states of the centre west, notably in Mato Grosso, has grown fast
in recent years. This has allowed more maize to be planted in
the area as a ‘winter’ crop, sown immediately after ‘summer’
soya has been harvested. Whereas a decade ago, two-thirds of
Brazil’s maize crop was grown in the summer, most of that in the
south and south east, now more than half the total maize crop is
grown in the centre west region in the ‘winter’, which is
relatively mild there.
Even now, less than half the total area planted to soya in the
summer in the centre west, is sown with maize in the winter. So
in theory at least, much more maize could be grown and
exported from Brazil. It probably will be if the demand exists,
and costs can be held down.
Although Brazil is widely seen as one of the few countries
with the potential to produce a large proportion of the huge
amounts of additional grains and oilseeds which will be needed
in the next few years, as the world population increases from
the current seven billion or so, to close to ten billion by the mid
century, this may not in fact occur, for several reasons.
Much of the huge increase in the area planted first to soya,
subsequently to maize in the centre west, has been explained by
changes to the way beef cattle have been raised in the region.
Most of the substantial amount of extra beef produced in Brazil
and exported to a growing range of countries, as beef becomes
popular in many places where the red meat was previously almost unknown, has also come from herds in the centre west
region. Herds have migrated from the south and centre west,
making way for more profitable grains.
Until very recently, animals have grazed on newly cleared
areas of native forest on the fringes of the Amazon rainforest,
where few crops were grown. After a few years of this rather
haphazard method of grazing, however, soils become exhausted.
When this happens, most ranchers have until now preferred to
move their stock to a newly cleared area of forest. Moving the
cattle on to new land, has been a much lower-cost option than
taking steps to increase productivity on the worn-out pastures.
Much of this ‘degraded’ land has been bought cheaply by
farmers wanting to plant soya in the past few years. If enough
fertilizer is applied,‘degraded’ land produces good soya crops
year after year. But with the price of cattle soaring and with
restrictions on clearing the native forest increasing, many
ranchers have begun improving the land themselves, and holding
onto their stock. So the amount of degraded land available for
planting crops has fallen.
It is important to remember that during the last ten years
‘boom’ in the amount of soya grown in Brazil, when the crop has
virtually doubled in size, the world price of soya beans rose
steadily as well. Soaring demand from China, caused mainly by
the fact that tens of millions of people who used to live and
work in the countryside, where they ate little and rather badly,
has moved to some of the thousands of fast-growing cities each
year, was the main reason. With more money to spend, urban
dwellers tend to eat more and better food, notably meats and
dairy produce, than those living in the country. Partly as a result
of the slowing of this migration, partly because the rate of
economic growth has slowed in the past couple of years, as well
as because of severe financial pressures, the authorities in China
have taken action aimed at slowing the record growth rate. At
the same time as growth was slowing in China, growth in many
countries in the developed world, notably those in Europe, but
also in Japan and elsewhere, have also slowed, and with it
demand for grains and meat, as well as dairy produce.
Because most farms in the centre west of Brazil are up to
2,000km from the nearest port, transport costs are far greater
than in most other countries with which Brazil has to compete
— notably Argentina and the United States, but also in some
grain producing countries in Eastern Europe. This year, although
a record 50mt of soya beans, as well as 15mt of soya meal, will
be exported from Brazil, lower prices mean the soya complex
will earn $7.5 billion dollars less from its exports than it did in
2014, a fall of 25% or so. While prices have been falling, costs,
particularly of transport but also of fertilizer, most of it
imported, have increased, again by up to 25%. This has caused
many farmers to start pressing the government to make more
low cost, or subsidized credit available to them. With prices and
demand rising for a decade, many farmers gave priority to
increasing plantings, often by renting more land and buying the
machines needed to plant and harvest the crops, rather than
paying their debts. Many farmers are now coming under
pressure from banks and other creditors and some have started
handing back some of their land. After a decade when the area
planted to soya increase by more than 2% each year, less will be
planted this year than last.
The situation would have been far worse for farmers in the
centre west and north east, than it has been, had not the
Brazilian currency fallen by up to 30% against the $US dollar, in
which the world prices of soya and maize are set, in the past
year. The result of the currency fall has been that although export earnings in US dollars have fallen sharply, earnings in local
currency, which form the majority of farm costs, have remained
steady or increased. So farmers have been protected so far.
Many of the reasons for the fall in the real are not just
temporary, but structural and will persist for several years.
Despite the fact that some measures have been taken to slow
the fall in the value of the real, the weak real is not bad news for
everybody. The weak currency means Brazilian-manufactured
goods have become more competitive in export markets, which
the government welcomes.
Higher earnings from the export of manufactured goods, will
partly compensate for the fact that the price of most
commodities, which form a large proportion of Brazil’s export
earnings, have fallen sharply in the past few years.
Soya and maize as well, are grown in two distinct areas in
Brazil, and different criteria apply to each of them. Until 30
years ago, the majority of both crops was grown either in the
three southern states, where the first varieties of soya available
at that time, were planted in Brazil, or in the adjacent the south
east. With few exceptions, only one crop could be grown each
year in such parts of the country, where winters are quite
Soya’s first advance, which occurred during the late 1960s and
accelerated during the 1970s, involved a move north into the
states of central Brazil. Most land there is of the ‘savannah’ type.
Soils are sandy and drain fast, and most vegetation is scrubby, as
soils are poor. Varieties of soya adapted to the climate in the
centre of Brazil, had been developed by agronomists, and large
amounts of fertilizer are used, which has allowed soya to move
north. Rainfall is concentrated in just five months in the
savannah region, while rains are better distributed in both the
south, and the centre west and north of Brazil, where the latest
expansions in planting have occurred, and new varieties of seed
suitable for the tropics, have been developed.
Huge areas of mainly scrubby forest were cleared in the
savannah, an area where eight of Brazil’s 12 major river systems
have their sources, and planted to growing soya.
Little attention was paid at that time to the impact clearing
the forest cover might have on the rainfall pattern, or of the
amount of water retained in the sandy soils.
The past three years in the south east of Brazil have seen
water levels in the reservoirs used both to generate electricity
and to store drinking water, fall to critical levels. Water tables
have been falling, along with rainfall in the savannah itself and in
neighbouring south east. This is causing great concern, as
scientists worry that the change might be permanent.
Concern is growing that the change in the weather pattern
may have been caused by the fact that huge areas are now
exposed directly to rain and sun, rather than being shielded by
their forest cover. Scientists are urging for measures to be taken
to replant savannah land with trees, at the expense of crops,. in
the savannah region. Much of the centre west is also savannah,
and the same concerns apply there.
Consumers in many of the countries where the soya is used
as animal feed have also become concerned about the threat of
climate change, so to counter this, the soya crushers adopted
measures aimed at ensuring that no new areas of native forest
may be cut by the farmers who supply them. This has resulted
in the rate of forest clearance falling sharply in the Amazon
region in recent years. But demand for timber remains
unabated, both for use in Brazil itself and for export and the
measures aimed a limiting forest clearances are often opposed
by farmers and ranchers, as well as loggers.