COFCO Has Pledged to Protect Brazil’s Cerrado, But is it Following Through?
Chinese giant international grain trader COFCO released its plan in July to protect Brazil’s Cerrado biome through achieving full traceability of its direct soy suppliers by 2023. In July the company stated that it was making its traceability plan public because it wanted to be held accountable to it, however, environmentalists have said that the plan falls short.
Brazil’s Cerrado biome includes all of Matopiba and half of Mato Grosso - where COFCO sources nearly a third of its Brazilian soy. Although not as well known as the Amazon, the Cerrado covers more than a fifth of the country and is equal in size to France, Germany, Spain, Italy, and England combined, but does not have the benefit of the environmental protections that the Amazon does.
The plan was linked to a $2.3 billion loan secured by the company, and has been widely praised in the finance sector. However, upon examination, the company did not reveal much information on how it was planning to reach its goal, or how much of an increase in soy volume would be necessary. But more critically, the company did not release any information about its indirect soy suppliers, or how much soy it sources from them.
COFCO stated that it already monitors all its direct soy suppliers within 25 municipalities in the Cerrado - but this accounts for only 25 percent of the soy sourced by the company in the biome, and 7.2 percent of the total soy sourced from the entire country - indicating that to achieve its goal by 2023, COFCO’s monitoring would need to expand by multiple times.