Lately, COFCO International, a subsidiary of COFCO, has fulfilled the first shipment of its ground-breaking agreement with Mengniu Group to deliver deforestation- and conversion-free (DCF) soybeans to China. The shipment was unloaded today in Tianjin, China.

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The deal, which was initiated through the World Economic Forum’s (WEF) and Tropical Forest Alliance’s (TFA) Taskforce on Green Value Chains for China, is the first in China to include a DCF clause.

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Importantly, the agreement has already paved the way for other similar sustainable agri trade into China by other members of the Green Value Chain Task Force, sending a strong signal to the global commodity market, and helping to accelerate sustainable commodity production and trade.

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As the global population expands, soy production is increasing to meet demand for meat and animal-derived products. Brazil is the world’s biggest soy producer. However, this increased production is associated with deforestation and conversion of natural ecosystems.

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As a major exporter of Brazilian soy, COFCO International is taking steps to improve traceability, risk management and supplier performance. Recognising the scale of the challenge, the company is also collaborating through collective industry initiatives such as the Taskforce on Green Value Chains for China, the Soft Commodities Forum and the Agricultural Sector Roadmap to 1.5C. In this way, the business is making progress towards its goals to achieve a deforestation-free soy supply chain by 2025 and reducing emissions from land use change in alignment with its climate strategy.

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“Today, more than ever, our industry must take action to help strengthen our food systems, promoting sustainable agricultural practices that protect our climate and environment, and helping to ensure a secure supply for affordable food for all while protecting farmer livelihoods,” said Wei Dong, Chief Executive Officer, COFCO International. “We congratulate and thank the Forum, TFA and the involved market players for convening the Taskforce on Green Value Chains for China and achieving the first milestones in the mainstreaming of sustainable soy supply to the Chinese market.”

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With China being the world’s largest buyer and importer of soybeans from Brazil, demand from the Chinese market is key for the transition towards DCF soybean production and trade. The new DCF deals with Chinese businesses are designed to support meeting of emissions reductions targets and broader climate goals, address the social and environmental issues that matter most to the company and its stakeholders, and respond to evolving consumer expectations.

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“The Chinese market plays an important role in global agricultural commodity trade, and has great potential to drive a green transition throughout value chains,” says Jack Hurd, Executive Director, Tropical Forest Alliance. “As a market leader in China, COFCO International has paved the way for sustainable procurement at a larger scale.”

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To help ensure that the soybeans reaching Mengniu Group are deforestation- and conversion-free, COFCO International uses a mass balance model. This is a volume-tracking system that enables a certain quantity of certified soybeans to enter the value chain, meaning that an equivalent amount can then be sold as certified.

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In preparation for the European Union Deforestation Regulation (EUDR), the company has also prepared to source, process and ship segregated soybeans, whereby certified volumes are kept physically separate from source through to processing, storage and distribution. COFCO International loaded its first fully traceable and segregated shipment of soymeal to test and align its systems with the upcoming EUDR requirements out of Argentina earlier this month with Ireland as the destination.

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“Sustainable consumption and high-quality development are important trends,” concludes Hurd. “We expect that the demand for more sustainable goods will increase steadily in the coming years. Based on this "zero deforestation" soybean order, COFCO will likely stimulate more demand in the Chinese market, and then drive the entire value chain to take action." Hurd concluded.”

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