European Update: 15 Days in the Old Continent Bring Good Prospects for Latin America

By Lorenzo Rolim da Silva

During the last two weeks, I traveled through Europe, specifically Belgium and the Netherlands, participating in the Annual Convention of the European Industrial Hemp Association (EIHA), one of the oldest and largest associations in the industry worldwide, while also visiting companies that the Latin American Industrial Hemp Association (LAIHA) considers strategic for the advancement of the industry in our region.

Annual EIHA Convention

I have attended the last two editions of the convention, in 2020 and 2021, which were held online due to the pandemic. During both occasions, I was invited to participate as a speaker and provide an update on our region. This year, the difference was the physical presence. The event was a success, with a packed auditorium, a highly engaged and participatory audience, and, of course, all attendees were representatives of companies, governments, or research institutions in some capacity.

Hemp in Europe is an old topic. The continent produces large quantities of seeds and fibers, and these products are available to the public in all countries of the bloc. CBD and other cannabinoids are growing every year and are very close to being considered food supplements by the European Union (especially full-spectrum extracts used in food products). The EIHA leads the largest industry study for the inclusion of extracts as “Novel Food,” a category of new food products that applies to the entire Eurozone, as it has been required that extracts go through the entire food safety and toxicity validation process. It is important to note that seeds, flours, proteins, teas, and other products that do not contain extracts have been marketed for many years, in fact, decades, without any issues in most countries.

The main theme of the Annual Convention was truly the Carbon market. A hot topic for any sector of the economy today, and hemp fits perfectly into this new category of “Carbon farming,” where crops are grown with the clear intention of absorbing as much carbon as possible from the atmosphere. In this regard, we were the absolute highlight. In my presentation, I emphasized everything that has been developed in Paraguay in recent years, especially the validation of absorption of up to 72 tons of carbon per hectare of hemp produced. This generated significant interest from nearly everyone present, along with, of course, all aspects of development and social inclusion of the projects. It was the first time in many years that it seemed very clear that our industry is ahead of theirs, as this type of validation is still unprecedented there. The lesson learned was that we must walk with our heads held high in the world of hemp, as in the first country that truly understood that industrial hemp is an agricultural commodity, we are already a global highlight. Imagine when it becomes something common in the region.

Additionally, I demonstrated with numbers the size of our agriculture, which left many people impressed, as these are figures they are not accustomed to seeing. The fact that Brazil has agricultural land areas larger than the total dimensions of many European countries generated many comments that, “when Brazil opens up to hemp, it will break our industry here.”

The good news we could extract from the event is that demand is growing strongly, both for food products and for natural fiber. In fact, the demand for fibers is surging in China, a country that produces hemp textile products for the world's largest brands.

The global food crisis, which has caused significant inflation worldwide, is also influencing a greater demand and rising prices for hemp-based foods. In almost every part of the world, the cultivated area decreased from 2021 to 2022, and a shortage of hemp seeds in Europe is already anticipated by the end of the year, which should lead to higher prices and an excellent opportunity for Latin American producers. The most sought-after products are whole seeds (for both human and animal consumption, especially in the growing poultry feed market) and isolated hemp proteins, which have been used in meat substitute products, a strong consumer preference in Europe. Now more than ever is the time for producers and processors in Latin America to integrate into the global trade chains of this commodity.

The bad news fell to the CBD industry and flower production, as many countries still have confusing rules and regulations. Additionally, global prices for flowers and extracts have been in almost constant decline over the past two years. I saw some European companies that are already pivoting to industrial hemp in search of more stable and open markets. The biggest, and perhaps only, expectation for improvement is the opening of the recreational market in Germany, expected in the next 12 months. Depending on the rules, it could be an excellent opportunity for selling accumulated stocks of flowers and extracts here in Uruguay and Colombia, as producers constantly reach out to us at LAIHA seeking assistance in marketing.

Visits to European Companies

After the event, I took the opportunity to visit some companies in search of partnerships to advance the industry in Latin America, particularly in the natural fiber sector. 

First, I visited Cretes BV, which offers engineering solutions for the harvesting and processing of hemp fibers, primarily for the textile industry. CEO Stefaan Declerck made it clear that the demand for machines has grown, especially orders coming from the USA, as many producers there are seeking higher value-added textile markets. The biggest challenge remains producing high-quality fiber, which is required by the textile industry, as this requires several years of practice and varieties that are highly productive in long fibers, something that is still lacking in North American agriculture. 

After that, I visited Groenoord, in northern Holland, which is linked to the John Deere group of agricultural machinery, primarily harvesters. They have developed an adaptation that allows for the simultaneous harvesting of seeds or flowers while cutting fibers for processing. This allows for the complete use of the plant and brings a lot of profitability to the farmer. Anyone who has harvested hemp on a large scale knows how difficult it is to achieve 100% utilization of the crop. And they also know that any additional value helps to balance the books afterward, especially in agriculture, where margins are small.

The last visit was to the HempFlax group, major processors of natural fiber, also located in northern Holland. Today, the group has a strong presence in the acoustic and thermal insulation market for construction and the non-woven market (natural fiber applications with slightly lower quality than the textile market) and also some sales for paper production. Another sector that, according to them, has grown significantly and now has a lot of attraction is the use of hurd, the short fiber of hemp, for animal bedding. In Europe, hemp has always been used for covering stables for horses, as it absorbs water much better than the sawdust typically used in Brazil. However, the sector really grew when they entered the pet segment, with specialized products to replace cat litter (much more sustainable as it is 100% biodegradable and leaves less odor) and for rabbits and birdcages.

With all of them, our intention was to create partnerships to bring these technologies and knowledge to the Latin American industry and create a bridge to accelerate the adoption of large-scale hemp fiber production and processing in Latin America, both to supply global markets and to create our own local processing. Stay tuned for updates from the Latin American Industrial Hemp Association in the coming months; great things are on the way!

The opinions expressed in this article are personal and do not necessarily reflect the position of Sechat.

About the author:

Lorenzo Rolim da Silva is an Agronomist and president of LAIHA (Latin American Industrial Hemp Association).