Chinese importers signal support for Brazil’s effort on fighting deforestation

Participants at a Sino-Brazil Soy Trade Symposium held in Beijing on 25 January called for greater awareness, participation and collaboration among Chinese soy importers to support sustainable soy trade.

The event was organized by a consortium of international organizations led by the Paulson Institute, including Solidaridad, The Nature Conservancy (TNC), and WWF, sponsored by the Gordon and Betty Moore Foundation. In March 2015, the four organizations launched the Sustainable Soy Trade Platform to support China’s soy purchasers to promote sustainable soy production through their supply chains.

The Beijing meeting was a follow-up to a recent fact-finding trip to Brazil, where a delegation of top Chinese soy importers signaled their willingness to support Brazil’s effort to eliminate deforestation and conversion of natural habitats in soy-producing areas.

During the trip, the group of seven top Chinese importers met with agricultural officials in Sao Paolo and then traveled to Mato Grosso state, the largest soy-producing state in Brazil, to better understand soy production and its environmental impacts. 'The companies that make up this delegation import more than 20 million tons of soy annually to China, and the tendency is for that to increase,' Liu Denggao, executive vice president of the China Soybean Industry Association and head of the delegation, said in a meeting with Mato Grosso acting Governor Carlos Favaro.

We do not want our demand for soy to lead to illegal deforestation in Brazil, and we are asking our suppliers for assurances in that respect. – Liu Denggao, Executive Vice President of the China Soy Bean Industry

'We are very encouraged by the Chinese importers’ commitment to promoting sustainable soy production in Brazil,' said Rose Niu, chief conservation officer at the Paulson Institute. 'A clear market demand signal for sustainability from China, which is the number one importer of soy, will help drive behaviour change among the producers and exporters towards sustainable production.'

Brazil is the largest source for China’s soy imports, supplying above 50% of China’s total import volume in 2014  'China and Brazil are natural partners and have an important commercial relationship,' said China Soybean Industry Association’s Liu. 'Naturally we want closer relations and to know better the areas where the soy we import comes from.'

David Cleary, agriculture director of The Nature Conservancy, said, 'The impact of Chinese demand is felt across the world. It is important that Chinese market players meet their peers in Brazil, so that new sustainability initiatives linking the two countries can develop in an organic way.'

Commercial agriculture and deforestation together account for 24% of global greenhouse emissions, and scientists agree that reducing tropical deforestation will be a key factor in slowing climate change. The Brazilian government has been making progress in controlling deforestation from rapid expansion of soy plantation, but implementation of its Forest Code at the local level is still a challenge.

The high-level Chinese delegation included some of China’s most important soy importers — COFCO, Jiusan Group, CP Group, Hopefull Group, Shandong Scents, Shengquan and others. They spent a week in Brazil, starting in Sao Paulo with visits to the Brazilian Rural Society and the Brazilian Association of Vegetable Oil Exporters (ABIOVE). In Mato Grosso, the soy importers met the Soy Producer Association of Mato Grosso (Aprosoja) and were received by the acting governor and Eduardo Moura, the state secretary of regional development. Themes discussed included market tendencies in Brazil and China, transport bottlenecks, environmental initiatives and sustainability, and progress and challenges in implementing the Forest Code in Brazil.

About the Sustainable Soy Trade Platform

Recognizing the strategic value of the soy trade link between South America and China, the Sustainable Soy Trade Platform (SSTP) seeks to advance the responsible procurement of soy in the Chinese market, starting with compliance to the Brazil Forest Code. The Sustainable Soy Trade Platform aims to help stakeholders share best practices and market information, discuss solutions and develop consensus around the best way to promote sustainable global agricultural business. Specifically, the project seeks to increase the proportion of soy sourced from registered Brazilian farmers—meaning farmers who follow strict environmental legislation—and exported to China by international conglomerates Cargill and Bunge. Led by the Paulson Institute with support from the Moore Foundation, the initiative is working to maximize the purchase of soy grown by farmers enrolled in the CAR system—a Brazilian regulation that ensures conservation of natural habitats.