China’s taste for sustainable soya could help curb deforestation

Importers signal intent to green supply chains in tentative first step towards sustainable trade

Major food importers from China can play an important role in the fight against deforestation by committing to supplying the domestic market with sustainably sourced products, industry experts say. More than ten big Chinese players in the international soya trade, who together accounted for a quarter of the country’s record 81.69 million tonnes of soybeans imported last year, indicated support for greening their supply chains at a symposium in Beijing recently. The event, co-hosted by Sanhe, HopeFull Grain and Oil Group, was organised by the China Soybean Industry Association and included representatives from civil society group Solidaridad and the US-based Paulson Institute, which promotes sustainable development in China and the United States. Liu Denggao, executive vice president of the China Soybean Industry Association, said that soya imports from Latin America’s main exporter, Brazil, would likely rise but emphasised that the crop should be sustainably sourced. “We do not want our demand for soya to lead to illegal deforestation in Brazil, and we are asking our suppliers for assurance in that respect,” he said. Growing demand for meat from China’s new middle classes is driving the growth in South American soya imports, which are used principally to feed livestock. Due to limited arable land, pollution and drought, China has been forced to outsource and expand soya production, leading Chinese soya imports to shoot up 14.4% year-on-year in 2015. Brazil accounts for 49% of the total, with 35% coming from the US and 14% from Argentina. Commercial agriculture and deforestation account for 24% of global greenhouse emissions, but China signalling a market demand for sustainable products would help drive behavioural change among producers and exporters, the Paulson Institute said in a press release. In March 2015 the Paulson Institute, Solidaridad, The Nature Conservancy and WWF launched the China-South American Sustainable Soya Trade Platform, aiming to increase the proportion of soya sourced from Brazilian farmers registered with Brazil’s Rural Environmental Registry (CAR in Portuguese), part of Brazil’s Forest Code. However, certification remains a big problem. The Brazilian government has struggled to monitor and enforce punishments for illegal land use, as the relationship between soya production and deforestation is complex. There is little transparency in international soya markets, and so it is very difficult for Chinese importers to ascertain whether their soya is coming from forest friendly sources or not. But while there is much to do on both sides, the fact that big Chinese food importers have come together and shown a willingness to adopt more sustainable practices is a marked step forward, according to Rose Niu, chief conservation officer at the Paulson Institute. “We have a great opportunity to help China take a leadership role on greening global soya supply chains, something that is of increasing interest to the Chinese government and key importers,” Niu said. Niu also highlighted the significance of former COFCO chairman Ning Gaoning’s declaration at the Paris climate summit in December that his company would ‘endorse and support’ farmers producing crops in environmentally friendly ways. Along with COFCO, other top soya traders Jiusan Group, Hope Full Group, CP Group, Shandong Scents and Shengquan and others recently took part in a ‘soya industry fact-finding trip’ to Brazil to familiarise themselves with their South American suppliers. Together, these companies accounted for 24.48% of China’s total soya imports in 2015. Niu says that as well as incentivising key players from Chinese business to source legally and sustainably produced soya, consumers also have a role to play: “This will be a long-term effort,” she told Diálogo Chino. “We need to work on raising awareness among the general public, so they understand better what they can do as consumers to help stop deforestation in Brazil and contribute to the global effort to fight climate change.” Tumbling global commodity prices will likely sharpen companies’ focus on their bottom lines, but committing to sustainability could help them secure long-term supply chains and improve their reputations. A bad reputation can cost companies dearly and lead to projects collapsing. Liu underscored the importance of dialogue between producers and distributors: “China and Brazil are natural partners and have an important commercial relationship. Naturally we want closer relations and to know better the areas where the soya we import comes from.”