China’s soybean imports have almost tripled in the last 10 years, from 37.8 million metric tons in 2007 to 94 million metric tons projected for 2017/2018 (WASDE, August 2017) with Brazil, Argentina and Paraguay as 1st, 3rd and 4th largest global soy exporters. With Chinese crushing facilities increasing their capacity, companies are more willing to turn toward international markets not only for feed but also for food-grade soybean because domestic production is no longer able to cover current demand.
Tied to the increasing demand of soybean, leading companies in the Chinese market are starting, slowly but surely, to become more aware of the need to embed sustainability policies and practices into their businesses in the search for long-term solutions to current soybean environmental and social challenges. In this regard, issues such as deforestation or soil and water contamination are linked to the expansion of soybean cultivation and variables that contribute to climate change. This could jeopardize the future capacity of the supply chain to meet Chinese demand.
With this context in mind, Solidaridad organized a learning experience aimed at facilitating an environment where representatives from major Chinese and South American soy organizations could understand the depths and complexities linked to soy and define potential solutions.
A cross-regional delegation
Solidaridad China and South America have been working for the last five years on mainstreaming responsible trade and production practices on the demand and supply end of the global soy supply chain. In a joint effort, this was the largest exchange group from the Sustainable Soy Trade Platform (SSTP) led by Solidaridad China and partners from Solidaridad’s soy programme to visit South America.
On the Chinese end, the delegation included: Executive President from Hopefull Grains & Oils Group, Tan Lin; Head of Strategic Development Department from Jiusan Group, Lichen Zhang; Corporate Sustainability Manager from COFCO International, Wei Peng, and Sustainability Manager, Julia Moretti; China Soybean Industry Association former Senior Vice President, Liu Denggao; Vice Secretary of China National Vegetable Oils Association, Gao Wen; Chairman of Heilongjiang Province Soybean Association, Tang Qijun; Yihai-Kerry (Shanghai) Trading Co. Ltd. Senior Manager of Oils Dept., Li Feng, and Director of Oils Dept., Sun Changyu, Deputy General Manager of Audit & Supervision Depart. From Sinograin Oils Corporation, Zhou Nong, and Supervisor of Administrative Depart., Ren Jiao and Market Intelligence Dept. from COFCO Group, Shi Junfeng.
Enhancing Chinese-Argentinian cooperation
The visit started in Buenos Aires with meetings at the Argentinian Ministry of Agro-Industry and at the Argentinian Oil Industry Chamber (CIARA) so Chinese companies could better understand the local political and legal framework, focusing on environmental protection, land use laws and regulations, and law enforcement challenges.
Today we met with CIARA, the Argentina Soy Association, and had a very good and deep discussion on global sustainability in the soy sector, discussing how to have deeper cooperation in soy trade, sharing soy industry information, guiding suggestions, and mechanisms for cooperation. It was a very rich discussion and exchange. I hope that after this type of discussion, together we can develop a closer cooperation to promote soy trade and particularly to make new progress in the global sustainability of soy trade. – Lichen Zhang, Jiusan Group Head of Strategic Development Department
The following day was spent in the city of Rosario, the main soybean trade port in Argentina and South America, where the delegation visited the Chamber of Commerce, the port facilities and Dreyfuss crushing facilities in order to get a better grasp of the economic importance of this export hub and its connection to soy production, processing and trading in Argentina and surrounding region.
Cross-regional learning experience
The last part of the visit involved a cross-regional seminar with core leading and influential organizations of the soy sector from South America and China, encompassing stakeholders from all types of sectors (governmental, private and civil society). This provided an opportunity for in-depth exchange on opportunities and challenges for sustainable soy provision as well as for building direct contacts between South America and Chinese soy industry stakeholders.
Looking at this meeting, where so many companies attended, our common objective is to discuss the issues in soy trade from an environmental protection and a sustainable development perspective. There are several soy trading companies here and relevant industry stakeholders [from South America], everyone can discuss the issues and give the global community a clear message that in soy procurement and soy consumption, we need to work together with soy producers to promote environmental protection, and together resolve the issue of soy production related to deforestation. This seminar today and the Sustainable Soy Trade Platform are both really good opportunities to have these discussions and develop consensus on these issues. – Dr Tan Lin, Executive President from Hopefull Grains & Oils Group
The first part of the seminar included presentations on the soy sectors in Argentina, Brazil, Paraguay, Bolivia and China, and a discussion panel on contextual factors, such as policies or financing, that affect and regulate the sector. In the afternoon the seminar delved into the plans and needs of the sector for growth while addressing key issues linked to environmental challenges, such as deforestation.
The seminar concluded with a break-out session to discuss ideas for cross-regional collaboration such as sharing information on land use, legal frameworks related to sustainability, funding for environmental services, promoting technical assistance on good agricultural practices and agreeing on common sustainability indicators for all participating countries.
“The importance of this engagement is that the actors involved have shown the will and leadership to materialize the dialogue into specific and concrete action points, aspects which will lead the whole soy value chain to a higher level of sustainability performance," said Alex Ehrenhaus, Solidaridad's international programme coordinator for soy.
Learn more about Solidaridad programmes for sustainable soy