June 5, 2008

China the likely destination for soy from Brazil's deforested land

China is likely buying soy from Brazilian farmlands that have been recently deforested, said Roberto Waack, director of Amata, a forest management service in Sao Paulo told reporters Wednesday ( June 4, 2008).

Recent government satellite imagery by the National Institute for Spacial Research, INPE, has suggested an increase in Amazon deforestation, with most of it going to farming and ranching.

According to INPE's real time deforestation monitoring system, 1,123 square kilometers of Amazon jungle were cut down in April, 80 percent of it in top soy-producing state Mato Grosso.

Waack said deforestation is happening because of agriculture. Although a greater part of China's soy crushing capacity is now owned by large foreign-owned companies, Waack said that major companies such as Archer Daniels Midland, Cargill and Bunge were not the buyers of any soy from deforested land.

The major soy exporters under the trade administration Abiove banded together in agreement to not purchase any soy farmed on newly deforested lands anywhere in Brazil. Abiove's decision followed a report from Greenpeace called "Eating the Amazon" that led McDonalds of Europe to stop buying all meat from chickens raised on soymeal shipped from the Amazon.

"The moratorium has worked, but Abiove does not control all of Brazil's soy market. Independent private traders are selling soy from these deforested lands to China," said Waack.

China is Brazil's leading soy buyer. Brazil is the No. 2 soy producer behind the U.S.