Sourcing and wholesale supply under the EUDR

The EU Deforestation Regulation applies from 30 December 2026 to large and medium-sized operators and to downstream operators and traders of all sizes, and from 30 June 2027 to micro and small operators for most products. It covers seven commodities: cattle, cocoa, coffee, oil palm, rubber, soya and wood, together with the products made from them that Annex I lists by customs code. If a product's code is not in Annex I, the Regulation does not apply to it, whatever a buyer's questionnaire asks.

That point is where much of the effort in the next eight months can be wasted. Where an EU buyer sends one supplier questionnaire for every product it buys, a supplier of hazelnuts, dried fruit or pulses can spend weeks collecting plot coordinates for goods that are outside scope. Meanwhile a supplier of a mixed product whose customs code falls under one of the listed cocoa or chocolate headings may not realise it is in scope at all. Scoping is done by customs code and by product. It should be done once, in writing, and sent with every reply.

The list also changed in 2026. Commission Delegated Regulation (EU) 2026/2102, adopted on 13 July 2026, removes cattle hides, skins and leather, re-treaded tyres, soybeans for sowing, articles of vulcanised rubber, conveyor and transmission belts, and aircraft and motor vehicle seats from scope. It adds soluble coffee, certain palm oil derivatives and frozen cattle tongues, which become subject to the Regulation from 30 December 2027. It also confirms that packing materials used to support, protect or carry another product, samples used for testing, waste and second-hand goods fall outside scope. A scoping note written in 2025 is already out of date.

Regulation (EU) 2025/2650, published in December 2025, moved the paperwork up the chain. Only the operator that first places a relevant product on the EU market, or exports it, submits the due diligence statement. Downstream operators and traders no longer file their own statements. They must collect and keep the reference number of the original statement, and every operator, whatever its size, must keep for five years the details of who supplied the product and to whom it was supplied. Micro and small primary operators in low-risk countries file a single simplified declaration instead.

For a trader, the obligation that looks lightest is the easiest to break. A reference number belongs to a specific consignment. If the warehouse puts two lots of cocoa or coffee with different references into one stack, or a blending step combines them, the trader can no longer say which reference covers which bag on the outgoing invoice. The control has to sit at lot level. Each inbound lot carries its reference number, each outbound lot records the inbound lots it came from, and the invoice prints the references for the goods it covers.

Producers and exporters outside the EU have no obligations under the Regulation unless they place products on the EU market themselves, but their EU customers will ask them for the data those customers need, including the location of the plots where the commodity was grown. A supplier that can send that data in a standard format with its first quote will be easier to buy from in 2027 than one that sends it after a week of emails.

The World Bank's April 2026 outlook projected commodity prices to rise 16% in 2026, the first annual increase since 2022, with energy up 24% and fertiliser up 31%. Brent crude rose from $72 a barrel at the end of February 2026 to $118 by the end of March, its largest monthly increase on record. The same outlook projected agricultural prices to fall 6% in 2026, because a 30% fall in beverage prices outweighs a 2% rise in food prices. By September 2026, UNCTAD's commodity price index stood 38.8% higher than a year earlier, with fuel up 57.1% and food up 8.0%.

For a food or agricultural trader those figures do not reconcile at first sight. The index for its own product can be flat or falling while its landed cost rises, because freight, fuel surcharges, packaging and trade finance are priced off energy and interest rates rather than off the commodity. A trader who quotes on a CFR or CIF basis with a 30-day validity set in a calmer year is giving the buyer a free option on freight and currency for a month.

The decision is how quotes are built and how long they hold. Separate the product price from the freight and surcharge elements, state which elements are fixed and which follow an index, shorten validity on routes where freight has moved most, and save the cost assumptions each contract was priced on. When the lot has shipped and any quality claim is settled, realised margin can then be compared with the margin assumed at quote, and the difference explained line by line.

A wholesale supplier that loses a large account usually starts looking for buyers in a hurry, and the new enquiries it accepts first tend to be the quickest to answer rather than the most likely to pay on time and reorder. Qualification costs less when it is done before the shortage.

A useful buyer file records, for each prospect, the products and grades it buys, annual volume, destination markets, the certificates it requires, the payment terms it accepts and, from December 2026, its role under the EUDR for in-scope products: operator, downstream operator or trader. That last field decides which documents the supplier must send and what the buyer will expect, and it changes the cost of serving the account. A supplier that gets it wrong for a cocoa or coffee buyer can deliver goods that meet the contract and still arrive without the reference number the buyer needs for its own records.

Concentration is the second test. Where three customers take most of the volume, one late payment or one lost tender changes the year's cash position. A reasonable aim for 2027 is a pipeline that names the next five accounts the business would accept and the reason each qualifies, kept current by the sales team and reviewed with finance every month.

In the wholesale supply work we do, trade buyers check specifications, certificates and minimum quantities on a supplier's website before they ask for a price. The enquiries that turn into contracts tend to arrive with enough detail to quote: product and grade, volume, packing, incoterm, destination port, delivery window, certificates required and, for in-scope products, the buyer's EUDR role.

Most enquiries arrive without that detail. They come by email, phone and messaging app with a product name and a request for a price, and the trader spends a day collecting the rest. A structured enquiry form on each product page, asking for the same fields the trader needs to quote, moves that day to the buyer's side. Routing each enquiry by product and language to a named trader, and recording the time to first quote, shows where enquiries wait.

The same records answer the questions management asks in a volatile year: how many enquiries were quoted, how many became contracts, at what margin assumed at quote, and how that compares with margin realised after freight, finance, exchange and claims. A business that can produce those figures by product and buyer has a basis for choosing which buyers and routes to grow in 2027.

By mid-November 2026, complete a written EUDR scoping note by customs code for every product you buy or sell, using Annex I as amended in 2026, and attach it to every questionnaire reply.

Before 30 December 2026, decide your role for each in-scope product, register in the EUDR Information System where your role requires it, and carry the reference number on the inbound lot record, the outbound lot and the invoice. If you are a micro or small operator with until 30 June 2027, use the extra six months to test the lot records rather than to postpone them.

Before the first quotes of 2027, fix the quote structure: product price separated from freight and surcharges, indexed elements stated, validity set by route, and cost assumptions saved with each contract.

By the end of the first quarter of 2027, build a qualified buyer file with EUDR role, payment terms and volume for each prospect, and agree with finance the share of volume above which a single customer triggers a review.

By June 2027, measure every enquiry from receipt to quote to contract to realised margin. Let the first full set of figures decide which origins, buyers and routes receive more of next season's working capital.