AN OUTLOOK ON GROWTH IN BRAZILIAN SOY INDUSTRY

Transcription

1 AN OUTLOOK ON GROWTH IN BRAZILIAN SOY INDUSTRY Presented by Fabio Trigueirinho Secretary General Brazilian Vegetable Oil Industries Association 1 st Roundtable on Sustainable Soy Conference

2 Why participate in the Roundtable on Sustainable Soy Conference Pillars of Sustainable Development Sustainable Development Environment Economic Soybean Social Brazilian Vegetable Oil Industries Association 2

3 Soybean is complex PALM Rural Producers Processors Oil Exporters SOYBEAN Rural Producers Processors Exporters Brazilian Vegetable Oil Industries Association 3

4 The Planet s Biggest Polluters Share in emissions in thousand tons of carbon/year, in % 4, % 2,389 TOTAL 13, % 7.4% 1,173 1, % % 3. 1% % 2.7% % 1. 9% 1.2% % 1.2% USA Russia n Japa Germany UK Canada Italy Poland France Australia Spain Netherlands Czechoslovakia Brazilian Vegetable Oil Industries Association 4 Romania

5 Forest areas in the U.S. Brazilian Vegetable Oil Industries Association 5

6 Forest Areas in Brazil Brazilian Vegetable Oil Industries Association 6

7 Legal Amazonia A Continent FRANCE ITALY GERMANY SPAIN Territory Brazil: 8.5 million km 2 Legal Amazonia: 5.1 million km 2 Brazilian Vegetable Oil Industries Association 7

8 Protected National Areas Indigenous Lands Parks and National Reserves Brazilian Vegetable Oil Industries Association 8

9 Protected National Areas ITALY ITALY ITALY 554 indigenous territories totalling 950,000 km 2 11% of the national territory Brazilian Vegetable Oil Industries Association 9

10 Environmental Advantages of the Energy Matrix Clean energy matrix: Electric Energy more than 90% is renewable Fuel - ¼ of all gasoline consumed is replaced by ethanol Biodiesel Program Brazilian Vegetable Oil Industries Association 10

11 Environmental Policy in Legal Amazonia In addition to the expansion of the permanent conservation areas on the banks of the rivers, the use of the soil in Legal Amazonia is very restricted. LEGAL RESERVE Area Up to 1998 After 1998 Available for Planting Forest 50% 80% 20% Cerrado 20% 35% 65% Brazilian Vegetable Oil Industries Association 11

12 Soybean Complex in Brazil ABIOVE Economic and Social Importance Soybeans are Brazil s main agricultural crop, in volume and revenues Over 243,000 producers (small, medium and large), scattered over 17 states Agricultural Income in 2003 Soybeans 19% Others 81% Source: CNA Brazilian Vegetable Oil Industries Association 12

13 Soybean Complex in Brazil National soybean production grew at an average rate of 11% over the last 6 years and has the potential to continue growing at high rates over the next years. 70,000 61,500 60,000 51,875 50, tons 50,000 40,000 30,000 34,127 39,058 42,769 20,000 10,000 Source: ABIOVE (F) (F) Forecast Jan/05 Brazilian Vegetable Oil Industries Association 13

14 Soybean Complex in Brazil Brazil is the world s second largest producer and exporter of soybeans, soybean meal and soybean oil The soybean complex is one of Brazil s main sources of foreign exchange (US$10 billion in 2004 = 12% of total exports) 12,000 US$ million 10,000 8,000 6,000 4,000 4,195 5,297 6,009 8,125 10,048 9,099 2,000 Source: ABIOVE (F) (F) Forecast Jan/05 Brazilian Vegetable Oil Industries Association 14

15 Soybean crop as a vector of sustained development The evolution of crop techniques and the tropicalization of soybeans allowed the extensive and rudimentary occupation of the cerrado to be replaced by an activity based on technology, with economic, social and environmental sustainability. The soybean crop development brought about an improvement in the quality of life and the development of infrastructure in the areas of transport, education and health. Brazilian Vegetable Oil Industries Association 15

16 Environmentally Friendly Technology Benefits of Direct Planting Lower carbon emissions Less erosion and leaching Reduction in the use of diesel Better use of inputs Greater retention of water Reduction of production costs Others Techniques Inoculation of Seeds Biological Control of Pests Brazilian Vegetable Oil Industries Association 16

17 Brazilian Vegetable Oil Industries Association 17 Source: USDA

18 Soybean crop as a vector of sustained development Source: IBGE Town 20 TOP TOWNS IN MATO GROSSO WITH BEST IDH IDH-M MT Class. Bzl Class. Economy Campos de Júlio Agribusiness Sorriso Agribusiness Cuiabá Capital Lucas do Rio Verde Agribusiness Cláudia Agribusiness Campo Novo do Parecis Agribusiness Sinop Agribusiness Primavera do Leste Agribusiness Alto Taquari Agribusiness Sapezal Agribusiness Nova Mutum Agribusiness Campo Verde Agribusiness Alto Garças Agribusiness Rondonópolis Agribusiness Barra do Garças Livestock/Industrial Várzea Grande Industrial Pontal do Araguaia Livestock Jaciara Diamantino Santa Carmem Lumber Agribusiness Agribusiness Brazilian Vegetable Oil Industries Association 18

19 Soybeans in Food and Energy It s the cheapest source of protein in the world. Proteic meal and vegetable oils are consumed in developing and developed countries. It is a high-grade food for human health (nutraceutic properties). Biodiesel Brazilian Vegetable Oil Industries Association 19

20 Agriculture in Legal Amazonia ABIOVE States Territory Open Area Agricultural Area Share % of % of km 2 % km 2 territory km 2 territory MATO GROSSO MT 906, % 294, % 68, % MARANHÃO MA 333, % 110, % 13, % TOCANTINS TO 278, % 28, % 5, % SUB-TOTAL 1,518, % 432, % 88, % RONDONIA RO 238, % 63, % 3, % PARÁ PA 1,253, % 215, % 6, % ACRE AC 153, % 16, % % RORAIMA RR 225, % 7, % % AMAPA AP 143, % 2, % % AMAZONAS AM 1,577,820 SUB-TOTAL 3,591, % 32, % % 70.3% 338, % 11, % TOTAL 5,109, % 771,225 15% 99,832 2% Source: INPE 2002 and Conab 2005 Brazilian Vegetable Oil Industries Association 20

21 Land Ownership in Legal Amazonia, States Territory 1,000km 2 Land Ownership (% of Legal Amazonia) Private Lands 2 Protected Areas 3 Lands in Dispute ACRE AC AMAPA AP AMAZONAS AM 1, MARANHÃO MA MATO GROSSO MT PARÁ PA 1, RONDONIA RO RORAIMA RR TOCANTINS TO LEGAL AMAZONIA 5, Source: Ibama (2002), Ricardo and Capobianco (2001), ISA (1999) and IBGE (1996) 2- Total area of private properties declared in the Agriculture/Livestock Census (IBGE 1996) 3- Includes Conservation Units and Indigenous Lands Brazilian Vegetable Oil Industries Association 21

22 Agriculture in Legal Amazonia Open Area 15% Agriculture 2% Of the 2% planted area in Legal Amazonia, 88% are concentrated in the States of Mato Grosso, Tocantins and Maranhão. Legal Amazonia 85% Soybeans occupy only 1.2% of the total area in Legal Amazonia, concentrated in Mato Grosso (87%). Therefore, the impact of soybeans on Legal Amazonia is not significant. Brazilian Vegetable Oil Industries Association 22

23 Agriculture in Legal Amazonia ABIOVE LAND USE IN MATO GROSSO Destination Area Share km 2 % Agriculture ,6% Livestock ,1% SUB-TOTAL ,7% Indigenous Areas ,8% Ecological Reserves ,0% Pantanal Marshlands ,0% SUB-TOTAL ,8% Cerrados e Forests ,5% TOTAL % Even in Mato Grosso, where conditions for planting soybeans are ideal, this activity occupies only 6% of the state s total area. Environmental legislation allows 65% of the land in the cerrado and 20% in forest areas to be used. Brazilian Vegetable Oil Industries Association 23

24 Environmental Conservation in Mato Grosso ABIOVE PEPE - State Program for Ecosystem Conservation Campaigns to reduce burn-slash clearance GEF - Integrated Management of the Upper Paraguay Basin and Strategy for Conservation of the Biodiversity of its Aquatic Ecosystem PGAI - Pilot Program for Protection of Brazil s Tropical Forests PPG7 - Total Environment Management Program PRODEAGRO - Agroenvironment Development Program for Mato Grosso State PEA/MT - Recovery Project for the Cuiabá River Basin Piracema - Fish Spawning Period Brazilian Vegetable Oil Industries Association 24

25 Competitivity in Soybean Production ABIOVE Description Mato Grosso USA Argentina FOB Port (US$5/bushel) Freight from farm to port Port expenses Sub-Total Taxes / Subsidies Producer Revenues Source: ABIOVE Brazilian Vegetable Oil Industries Association 25

26 Trade Barriers to Brazilian Exports (%) ABIOVE Product EU USA JAPAN Raw Sugar 161* 167* 154* Ethanol 47* 48* 83 Powder Milk 69* 49* 197* Frozen Chicken Cuts 95* 17* 12 Frozen Pork 51* 0 310* Frozen Beef 177* Corn 85* 2* 95* Tobacco 25* Orange Juice 15 45* 21 (*) indicates that specific tariffs were converted into their Ad Valorem Equivalent (AVE). Underlined numbers indicate the existence of Special Safeguard Measures (SSG). Shaded cells indicate sanitary restrictions that act as a barrier to trade. Source: WTO, APEC, COMTRADE, USITC and TARIC12 and ICONE Brazilian Vegetable Oil Industries Association 26

27 Evolution of Soy Production Production (million tons) Acreage (million ha) Production (2005=100) Acreage (2005=100) In 2020, Brazil should be producing about 105 million tons of soybeans, occupying an additional 8 million hectares, distributed throughout the country. The 70% increase in production will require an increase of only 37% in area, thanks to estimated gains in productivity (1.5% per year). Brazilian Vegetable Oil Industries Association 27

28 Integration of Soybeans with Livestock LIVESTOCK PASTURE AREA Degraded pastures give way to soybean plantations The area receives fertilizers and soil correction ROTATION INTEGRATION CROPS-LIVESTOCK SOYBEANS CROP AREA With recovered pastures, more cattle can be fattened than before After some harvests, the area can again be converted into pasture Soybeans retain nitrogen, helping improve the soil Brazilian Vegetable Oil Industries Association 28

29 Integration of Soybeans with Livestock ABIOVE Advantages of the Integration System: Livestock farmers don t spend money on pasture recovery and even have gains with soybeans (leasing). There are environmental and economic benefits in adopting the integration of both activities. The property is used more intensively, reducing the pressure to get new areas for agricultural production. There are about 30 million hectares of low productivity pastures that could be replaced by agriculture. Brazilian Vegetable Oil Industries Association 29

30 Conclusions ABIOVE Brazil does not pollute the environment to the same extent as developed countries. Soybeans are environmentally friendly and are not devasting the Amazon Forest. The processing industry does not produce soybeans, but will collaborate in discussing voluntary certification for the sustainability of soybeans which requires: The production chain is adequately remunerated (consumers) It is accepted by the soybean producer and other players (feasible conditions) No discrimination between countries Brazilian Vegetable Oil Industries Association 30