Traders Strike Deals For Deforestation-Free Coffee To Europe – CoffeeTalk

Coffee traders, including Sucafina SA, Ecom Agroindustrial Corp., Louis Dreyfus Co., and Cofco International Ltd., have struck deals to sell coffee that will comply with the European Union’s new deforestation regulation. The deals come as the bloc is yet to provide details on what documentation countries will need to comply with the regulations. This means traders are taking additional risk on their books but also signal companies are confident coffee will continue to flow even if requests to delay the regulation by countries like Brazil and Germany ultimately fail.

The EU’s Deforestation Regulation, set to take effect in December, will require importers into the bloc to prove that commodities like coffee, beef, cocoa, and timber do not contribute to deforestation. The lack of detail on how to implement the rules has prompted Germany’s Agriculture Ministry to call for a six-month delay, adding to objections already voiced by nations including Brazil and Indonesia.

The deals, also struck by StoneX and a unit of Olam Group Ltd., are for coffee produced in Brazil and Vietnam. Beans compliant with the rules, known as EUDR, were being sold for delivery next year at a premium of 3 to 5 cents to the price of futures traded in New York.

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