Chinese soy trade in the spotlight

Helen Burley

On the road in China

China is the biggest export market for Brazilian soy, with around 54 million tons of soy exported from Brazil to China in 2017. That means Chinese demand for soy plays an important role in shaping the Brazilian soy trade — and its sustainability.

That is why the Trase team was delighted to be invited to send a representative to join the China Soy Roadshow, organised by The Nature Conservancy and Solidaridad which takes place this month.

Global Canopy researcher Andre Vasconcelos will be joining representatives from Solidaridad, The Nature Conservancy, Global Forest Watch and Agroideal on a series of visits to meet soy traders, related industries and government bodies to present the range of tools, such as Trase, that have been developed to support sustainable sourcing, and to get feedback on how these tools can better meet user needs.

To support the trip, the Trase site is now available in Mandarin.

Exploring China’s supply chain

China’s appetite for Brazilian soy has grown rapidly in recent years, with the volume exported to China more than doubling by 2017 from just over 23 million tons in 2012. This increase in demand poses a potential threat to Brazil’s forests and other native vegetation, with soy plantations expanding rapidly in the biodiverse-rich Cerrado region.

Trase shows that China was exposed to 223,000 hectares of soy deforestation risk between 2013 and 2017 — calculated by multiplying the total soy-related deforestation in the relevant producing localities by the share of that soy output sold to China.

But as our new infobrief, China’s Brazilian soy supply chains, shows, the exports come predominantly from the South of the country (40%) where levels of soy deforestation are far lower.

Map shows sourcing regions and deforestation risk (see here)

Just eight percent of Chinese exports came from the Matopiba, in the the Cerrado — a region covering the state of Tocantins and some parts of the states of Maranhão, Piauí and Bahia, where soy is expanding into native vegetation, threatening the biodiversity in the region, displacing local and traditional communities and affecting the quality of their lives.

But while China sources only a small proportion of soy from Matopiba, 80% of the total soy deforestation risk is associated with soy from this region.

A further 12% of China’s soy comes from the Amazon region, where direct deforestation driven by soy has fallen sharply following the introduction of a set of innovative public policies in the last decade combined with the Soy Moratorium initiative. But some deforestation risks remain, including indirect deforestation, which is particularly hard to measure.

Mato Grosso provides 26% of the soy exported to China and is the source of 12% of the deforestation risk.

There are also fears that Brazil’s government could setback progress in this area — with costs for both the forest and the communities that live there.

Opportunities for dialogue

The Soy Roadshow will visit a number of soy traders operating in China, including Cargill, Wilmar and the Chinese company COFCO. Many of these companies have introduced commitments not to source soy from recently deforested areas and the Trase team will be keen to learn more about their approach.

Given the growth in Chinese demand for soy, the Trase team will be focusing increasing efforts on understanding how can support efforts to shift to more sustainable sourcing patterns, not just for soy, but for other forest-risk commodities.

Isabel Nepstad, the Soy Program Manager for the China Solidaridad Network said:

This roadshow comes at an important moment as the Sustainable Soy Trade Platform (SSTP) members are in the process to develop the China Sustainable Soy Guidelines to demonstrate China’s efforts to address deforestation and sustainability in the soy supply chain.

“While the industry is facing complex challenges from African Swine Fever to trade tensions, sustainability is viewed as the way forward to guarantee long term growth and stability. The Chinese soy industry actors recognize the global shared challenge of addressing deforestation and joint efforts needed to address climate change.

“We hope that Trase and the other tools can help to provide insight to the industry actors in China to better understand their supply chains and help to define their own sustainable soy standards and mechanisms to be included in the guidelines.

Read the new infobrief in Mandarin here.