Chinese Soy Importers Signal Support for Brazil’s Effort on Fighting Deforestation

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

The event was organized by the China Soybean Industry Association and hosted by Sanhe Hopefull Grain & Oil Group. More than 10 senior Chinese soy trade executives, as well as representatives from the Paulson Institute and Solidaridad, attended the meeting. Participants discussed challenges in China’s soy industry and how to improve exchanges between Chinese and Brazilian soy market players to advance sustainable soy production and trade.

The Beijing meeting was a follow-up to a recent soy industry fact-finding trip to Brazil, organized by the Paulson Institute, Solidaridad, The Nature Conservancy, and WWF, who together in March founded the China-South American Sustainable Soy Trade Platform to help China’s soy purchasers promote sustainable soy production through their supply chains.

During the visit, top Chinese soy importers, including Jiusan and Hopefull, signaled willingness to support Brazil’s conservation policies and expressed appreciation for the environmental protection measures of the Brazilian Soybean Association and soy planters. They also expressed their aim to not import soybeans from planters listed on Brazil’s blacklist.

“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.”

“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 behavior change among the producers and exporters towards sustainable production.”

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.”

Brazil is the largest source for China’s soy imports. Total import volume in 2015 hit a record high of 81.69 million tons (Brazil contributed 49% and the U.S. 35%), a 14.4% increase compared to 2014 levels, according to the data issued by China General Administration of Customs. “China and Brazil are natural partners and have an important commercial relationship,” said the China Soybean Industry Association’s Liu. “Naturally we want closer relations and to know better the areas where the soy we import comes from.”

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 China-South America Sustainable Soy Trade Platform: Recognizing the strategic value of the soy trade link between South America and China, the China-South America Sustainable Soy Trade Platform (SSTP) seeks to help Chinese market participants to implement sustainable purchasing policies and practices, using market demand signals to encourage Brazilian soy producers to comply with the Brazil Forest Code and thereby reduce illegal deforestation. 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.