Environmental policy in European Union Reintroduces high-impact change to supplier countries Agricultural industrial raw materials. The European Parliament approved a new one-year extension in the application of Regulation 1115/2023Which seeks to prevent products from deforested lands from entering the bloc. The rule, originally approved in April 2023, was scheduled to take effect in 2025, then was postponed to 2026 and now its entry into force has been moved to 2027.
The resolution, which was voted on 402 members in favor, 250 opposed and 8 abstaining from votingIt means not only postponing deadlines but also a Simplify administrative requirements. As agreed, large operators must adhere to their obligations December 30, 2026while small and micro companies will do so from June 30, 2027.
The focus of responsibility is to submit an advertisement “Due diligence” It will now fall to companies introducing products for the first time in the European market, in particular Wholesale importers.
Impact of anti-deforestation regulation on Argentine exports
From a geopolitical point of view, the regulation is read by many exporting countries as Semi-customs barrierBecause it sets for the first time environmental rules directly linked to international trade. Officially, the base aims to combat Climate change and Loss of biodiversityAnd access to products like Cocoa, coffee, palm oil, soybeans, wood, rubber, coal, printed paper and animal products.
to ArgentinaPostponement is relevant because of the weight it carries The European Union as a destination for strategic exportsand in particular meat and soybeanThey are two complexes located at the heart of agro-industry trade and foreign exchange generation.
Beef: High-value export under regulatory pressure
Europe almost sucks 20% Of beef exported by Argentina. Moreover, it is The highest market value per ton Until now, it concentrates shipments Premium reductions under preferential tariff quotas like Hilton fees and Share 481. We will have to see what happens with the agreement with the United States, which will exceed these values by the agreed upon size.
in case Share 481It’s a share 48,200 tons annually High quality meat that can enter the EU without customs duties. It is required that the animals have passed more than 100 days in feedlot With a specific diet that does not exceed two permanent incisor teeth. The allocation system is “first come first served” and Argentina is among the approved countries.
In parallel, the Hilton fees The amount allocated to Argentina is 29,500 tons per year, distributed between meat processing plants and export producer groups. Nuclear in Asia. At current prices, this volume represents an order 550 million US dollars.
According to exporters’ reports, prices… Rump and loin The ones sold within Hilton’s share – loin, rump and chorizo steak – fall in between US$18,000 and US$18,300 per tonwhile tons of steak, due to the great demand for it, is approaching 19,000 US dollars. These are the highest nominal dollar values in history, in a context in which global demand for meat is growing faster than supply.
Major meat buyers in Europe
During the first nine months of the year Germany It remained the main European buyer of Argentine beef, with Product weight: 18,403 tonsequivalent 4.4% Of the country’s total exports. This size represents a Annual increase of 8.5%. Average price reached US$12,745 per ton of product weightA 21.1% higher than the previous year, which allowed for billing 234.5 million US dollarsA 31.4% More on an annual basis.
the Holland They imported it Product weight: 17,142 tonstogether 49.4% annual growth. The average price rose 12.2%until US$11,277 per tonwhich resulted in bills being raised to 193.3 million US dollarsA 67.6% More than the previous year.
Meanwhile, Italy Bought 4,961 tonstogether Volume decrease by 2.4%but with A 22.1% increase in pricesuntil US$11,224 per tonresulting in invoices being sent to 55.68 million US dollars. SpainFor her part, it was important 1,394 tonsA 11.9% More than last year, where prices averaged $12,709 And bills 17.72 million US dollars, 43.7% Higher year on year.
In this scenario High prices A strong reliance on Europe as a destination Special discountsthe Anti-deforestation regulations introduce a structural risk factor. It adds a requirement to prove that production does not come from deforested areas Costs, administrative complexity and potential limitations For producers and meatpacking plants, though, there will be an additional year of transition period.
Soybeans: A major trading partner dependent on South America
From a point of view Soy complexthe European Union It is the main destination of Argentine soy flour. On average over the past five years, One out of every five tons of soybeans exported By the country heading to the European bloc. Moreover, the European Union is The world’s largest importer of soybean mealwith volumes three times those of Indonesia and Vietnam, which rank second and third.
the Common Agricultural Policy (CAP) It has strengthened Europe as a highly self-sufficient bloc in many strategic foods, such as dairy, eggs, poultry, grains, pork and sugar. but, This self-sufficiency is not repeated in any other case Beans and soy flourThey are essential inputs for animal nutrition within the framework of the “farm to fork” strategy proposed by the Europeans.
near 60% Of soybean meal consumption in the European Union is imported and exceeds this percentage 80% In the case of beans. For flour and pellets, almost all purchases come from outside south america. Brazil and Argentina It concentrates the largest historical shares, although Brazil has gained a market in recent sessions due to drought in Argentina. Part of the presentation is also explained by Internal crushing Within the same block, with Netherlands and Germany Like large processors.
In soybeans, import dependence is greater. Brazil and the United States Together they explain more than 77% Of European imports. ArgentinaOn the other hand, it is hardly involved as a bean supplier. in Soybean oilThe country is the main non-European supplier, although its share is barely there 4% Of the total. Most of the oil imported by the European Union comes from neighboring countries such as: Ukraine, Norway and SerbiaThese imports represent about a quarter of European domestic consumption.
In this commercial context Argentine soybean complex appears as Structural supplier for the European food and livestock industry. For this reason, the entry into force of the law was postponed Regulating the fight against deforestationhas direct effects on Export competitivenessother than the fact that some demands officially fall on European importers.
South American weight and regional asymmetry
At the global level, South America provides 65% of soybeans That the world matters, 65% of oil and 70% of flour. If we consider it exclusively Brazil and Paraguayboth countries jointly explain 34% of flour, 24% of oil and 62% of soybeans that are traded between countries. This concentration makes area A A central actor in achieving global food securitybut also in the main focus of European environmental policies.
in Brazilhe Rural Environmental Land Registry (CAR) It serves as a public and mandatory register of rural properties, integrating environmental and ocean information and the conservation of local plants. Registration in the Central African Republic is a condition for, and complements, access to agricultural credit and support programmes Environmental Regulatory Programs (PRA). However, the system does not provide specific production information about batches, so… Possibility of tracking crops It usually depends on special systems.
in ParaguayThe geolocation of deforestation is determined through the platform viewfinderdeveloped by the private sector in cooperation with National Forest Institute. The Forestry Commission is working on a certification system that will allow it to prove that an organization has not experienced deforestation since the deadline, which is expected to be in line with the 2020 set by European regulations. In addition, it seeks to integrate public information to fully track the flow of grains and by-products.
These differences in the degree of progress in Tracking systems between Argentina, Brazil and Paraguay Relevant to the dispute over markets within the European Union, particularly in the context of where Environmental requirements are transformed into commercial standards.
New domestic architecture in the face of European regulation
The main tool that is Argentina To meet the new European standard is the platform ViSeCA special initiative of Environmental traceability and legal compliance For soybeans and beef. Its goal is to ensure that these products come from areas where there is no deforestation and to facilitate access to demanding markets such as Europe.
Last September, Rosario Stock Exchange Signed an agreement with the national government Sectoral vision of the Argentine Gran Chaco To strengthen the system. The agreement is based on its experience in developing digital services for agricultural businesses. With this plan, the state will be able to implement Final tracking verificationand harmonizing the local statute with the requirements of Regulation 1115/2023.
ViSeC was studied at the recent World Soybean Congress (WSRC11) due to its advanced degree of geolocation and institutionalization. In addition, the agreement included strengthening Argentine carbon neutral programmeIt is an initiative aimed at unifying tools to calculate and manage the carbon equivalent of each agricultural industrial product, with the participation of several trading and grain exchanges in the country.
Stretching gives air, but does not dissolve matter
New postponement Regulating the fight against deforestation gives to Argentina A Additional time frame To complete tracking systems, control production processes and reduce business risks. However, it does not cancel Structural pressure Which represents a regulation that redefines the conditions for access to the main premium market for meat and one of the largest destinations for soybeans and its derivatives.
with Meat price recordingshares that move Hundreds of millions of dollars And a Soy complex is deeply integrated into the European protein chainThe challenge is not limited to the environment only. It is Economic, commercial and geopoliticalin a context in which Europe is moving forward with regulatory rules that are reorganizing global food trade and forcing exporting countries to redefine their production structure so as not to be excluded from the market.
The postponement of Regulation 1115/2023 of the European Union has a full impact on Argentine meat and soy exportsGive another year to adapt to environmental requirements, while continuing to put pressure on the competitiveness and traceability of the agro-industrial sector.