Latin America holds significant economic importance in global agriculture, supplying vital commodities to the European Union (EU). Countries such as Brazil, Argentina, Colombia, and Peru have emerged as key exporters of coffee, cocoa, soy, and palm oil, supplying global markets’ demand and supporting local economies.
In 2023, Brazil led Latin American coffee exports with a staggering value of $7.35 billion, followed by Colombia at $2.9 billion and Honduras at $1.48 billion, according to a Statista report (2024). Meanwhile, Peru was among the top global exporters of fine cocoa beans, sending $102.12 million worth of cocoa to European chocolate manufacturers in 2022 (Trading Economics, 2024).
However, the region’s economic gains have come at a steep environmental cost. Latin America and the Caribbean account for 44% of global tropical forest loss, driven largely by commercial agriculture, which contributes to 77% of deforestation in the region (Forest Trends, 2021). Brazil alone loses 1.7 million hectares of forest annually, contributing one-third of global tropical deforestation, making it a focal point for sustainability concerns (OurWorldInData, 2021).
EUDR: A Game-Changer for Latin American Exporters
To curb the environmental toll of agriculture, the EU is rolling out the European Union Deforestation-Free Regulation (EUDR), set to be enforced by the end of 2024. The EUDR aims to eliminate deforestation-linked products from the EU market by imposing rigorous supply chain traceability, risk assessments, and reporting requirements for commodities entering the EU.
This regulatory shift poses serious challenges for businesses in Latin America, where transparency and traceability in the supply chain are often underdeveloped. Without compliance, exporters risk restricted access to EU markets, financial penalties, and damage to their reputations, potentially jeopardising billions in export revenues. For Latin American producers—many of whom operate as cooperatives or small-to-medium-sized enterprises (SMEs)—adhering to the EUDR is not just an environmental mandate but a business imperative. Failure to comply could result in the loss of critical market access to one of their largest trading partners.
What Are the Main Challenges?
The primary challenge for Latin American exporters lies in the lack of established infrastructure for supply chain transparency. Many businesses still rely on traditional methods of data collection, often inconsistent or incomplete, making compliance with the EUDR difficult.
“Latin American producers, especially SMEs, face a steep learning curve when it comes to EUDR compliance. It’s not just about meeting new standards; it requires rethinking how data is collected and managed across the entire supply chain,” said Silvan Ziegler, Head of Markets for Latin America at KOLTIVA. “Without proper tools and guidance, these businesses risk losing access to the EU market.”
Additionally, the complexity of the EUDR requirements for Due Diligence Statement (DDS) and risk assessment adds further layers of difficulty. Many SMEs lack the technical expertise and resources to implement these changes independently.
KOLTIVA, a global leader in agriculture and supply chain traceability solutions, is stepping up to help Latin American businesses, cooperatives, and SMEs navigate the challenges of the EUDR. With over 11 years of experience supporting businesses across 65 countries, KOLTIVA has developed robust tools like KoltiTrace MIS, which enable comprehensive supply chain data collection, management, and reporting.
“Traceability is no longer a ‘nice-to-have’; it’s a necessity. Our platform simplifies the process for businesses, especially SMEs, by offering end-to-end solutions—from risk assessments to DDR submissions,” Silvan added. “We’re here to ensure businesses can meet the EUDR’s demands without disrupting their operations.”
Beyond Traceability Talks on Steering Latin America Businesses Toward EUDR Compliance
To help Latin American exporters get ahead of these challenges, KOLTIVA will host a webinar on November 6, 2024. Titled Beyond Traceability Talks: Steering Latin America’s Businesses Toward EUDR Compliance, this event, featuring Manfred Borer, CEO and Co-Founder KOLTIVA, Silvan Ziegler, Head of Markets Latin America KOLTIVA, and other distinguished experts, will provide hands-on advice, including success stories from real EUDR projects, practical strategies for supply chain risk assessment, and actionable steps for full compliance. Attendees will also have the opportunity to engage directly with the experts and gain insights into how the company’s solutions can be tailored to their unique needs.
KOLTIVA are currently working with multiple clients around the globe on the EUDR compliance efforts. In Latin America, it works with notable clients from rubber, cacao, coffee, and other commodities to expedite their EUDR compliance, but also other projects with cooperatives and business entities on traceability, supply chain mapping, smallholder capacity building, and implementation of an innovative geographical indications traceability system. Its modular approach, consisting of KoltiTrace, KoltiSkills, and KoltiVerify ensure all requirements from the EU are met.
As a registered Operator (Authorised Representative), KOLTIVA is actively engaged in the pilot phase of integrating our systems with the TRACES platform. TRACES is an online system that oversees EU-mandated certifications related to the importation of animals, animal products, food, and plants, as well as intra-EU trade and exports of certain animal products. This integration allows the clients to designate KOLTIVA as their representative for compliance with the European Union Deforestation Regulation (EUDR).
Compliance with the EU Deforestation Regulation (EUDR) is becoming increasingly critical, with substantial risks for businesses that do not meet the requirements. This webinar provides an in-depth analysis and actionable strategies tailored to businesses, cooperatives, and SMEs to help them navigate compliance challenges while promoting sustainable agricultural practices across Latin America. For more information and to register, visit https://www.koltiva.com/beyondtraceability-talks